Gemini Co-Founder Accuses DCG’s Silbert of 'Bad Faith' Stalling in $900M Locked Funds Dispute
The co-founder of crypto exchange Gemini has accused Digital Currency Group CEO Barry Silbert of “bad faith stall tactics” as their respective companies lock horns over a business disagreement precipitated by FTX’s multi-billion-dollar implosion late last year.
Cameron Winklevoss blasted Silbert in an open letter posted to Twitter, alleging crypto broker Genesis Global Capital and its parent company, DCG, owe Gemini’s clients $900 million. The letter alleges Gemini has awaited word on a repayment agreement for six weeks to no avail. DCG is CoinDesk’s parent company.
Silbert responded, tweeting that DCG delivered to Genesis and Gemini’s advisers a proposal on Dec. 29, 2022, and has not had any response.
Winklevoss also accused DCG CEO Barry Silbert of using $1.675 billion in money Winklevoss claimed DCG borrowed from Genesis and using it for purposes that helped other DCG ventures instead of repaying creditors. DCG is also the parent company of CoinDesk.
“You took this money - the money of schoolteachers - fo fuel greedy share buybacks, illiquid venture investments, and kamikaze Grayscale NAV trades that ballooned the fee-generating AUM of your Trust, all at the expense of creditors and all for your own personal gain.”
Silbert responded, tweeting that DCG “did not borrow $1.675 billion from Genesis." He also said DCG has never missed an interest payment to Genesis and is current on all loans outstanding.
Gemini Trust Co., which is co-owned by Winklevoss and his twin brother, paused redemptions on an interest-earning product called Earn in mid-November, a week after rival crypto exchange FTX filed for bankruptcy. The product offered investors opportunities to yield as much as 8% interest on their crypto by lending those digital tokens out to Genesis.
Gemini’s redemption pause came on the heels of Genesis' announcement that its derivatives business had roughly $175 million locked on now-insolvent FTX’s platform. Genesis halted withdrawals and suspended new loan originations when FTX filed for bankruptcy. Since then, creditors to Genesis are working with restructuring lawyers to prevent insolvency.
Winklevoss’ letter comes as his company faces major financial headwinds, including a lawsuit against the firm’s Earn product alleging fraud and securities law violations and a mob of angry Earn customers who have been unable to access their accounts.
Neither Winklevoss nor Silbert responded to requests for further comment.