Gemini exchange co-founder Cameron Winklevoss has pointed the finger at Barry Silbert, the cryptocurrency baron and CEO of Digital Currency Group.
Through an open letter dated 2 January 2023, Cameron Winklevoss is inviting DCG’s CEO to resolve Genesis’s liquidity problems so as to settle the debt with Gemini.
Indeed, almost 50 days have passed since Genesis’ withdrawal freeze, and considering the huge debt Digital Group Currency owes Genesis ($1.675 billion), the letter specifies that the liquidity must be released within a week.
The final excerpt of the letter:
“Earn users are Tired. They’re scared. Many are now in dire straits. And yet despite all that they had to endure, they have been remarkably patient and supportive. But there is only so much more they can take. They deserve a resolution for a recovery of the assets that lent to publicly commit to working together to solve this problem by January 8th, 2023. We remain ready and willing to work with you, but time is running out.
Sincerely,
Cameron Winklevoss.”
Summary
Gemini President Cameron Winklevoss accuses Barry Silbert of “stalling tactics in bad faith”
In the Gemini company, Cameron Winklevoss serves as co-founder and president of the exchange.
In the letter addressed to Digital Currency Group CEO Barry Silbert, there is the specific accusation that he has engaged in bad faith stalling tactics to withhold funds that would be owed to Genesis.
Although they are all aware that both Genesis and Digital Currency Group, were involved with the collapse of FTX and therefore also succumbed to a crisis due to a cascading effect, the president of the Gemini exchange believes too much time has passed and wants his money back.
The issue stems from a deal Gemini has with Genesis Global Capital, the lending arm of crypto investment firm Genesis Global Trading, a subsidiary of Digital Currency Group.
Gemini has offered users returns of up to 8% through its Gemini Earn lending product. To generate these returns, Gemini lent users’ funds to Genesis Global Capital, which in turn lent them to institutional borrowers.
The collapse of FTX, the subsequent filing for bankruptcy through Chapter 11, caused Gemini to suspend repayments for its Gemini Earn service. Clearly, this was related to the earlier suspension of loans by Genesis Global Capital.
According to the open letter from Gemini President Cameron Winklevoss, Genesis owes the exchange platform $900 million:
“Over the past six weeks, we have done everything we can to engage with you in good faith and in a collaborative manner in order to reach a consensual resolution for you to repay the $900 million you owe while helping you preserve your business. We realize there are start-up costs to any restructuring, and sometimes things don’t go as quickly as we all would like. However, it is now becoming clear that you have engaged in bad faith stalling tactics.”
Barry Silbert’s silence puts Gemini in trouble
As unusual as it may seem to write an open letter, displaying it to the Twitter audience in its entirety, showing what your company’s problems actually are, has shed light on many unresolved issues.
It is inferred in the letter that the attempt by the Winklevoss twins, founders of Gemini, is a last resort, having tried more than once to propose certain solutions to Genesis and Digital Currency Group.
In fact, taking excerpts from the letter, Cameron Winklevoss refers to more than one attempt by his company to solve the problem together, specifically he referred to a proposal on 17 December and a new proposal on Christmas Day, 25 December, both of which went unanswered by Barry Silbert of Digital Currency Group.
“For example, last December 2 we shared our convience of the need for all of us to get together as soon as possible, the most useful path to obtaining a solution.
You agreed, saying that you would do so, however, only with a concrete proposal on the table. On December 17, a proposal was delivered to you. On December 25, Christmas Day, you were delivered an updated version of the proposal. Despite this you continue to refuse to meet with us to find a solution.
In addition, you also continue to refuse an agreement on a timeline with intermediate goals. Every time we ask you for concrete commitments, you hide behind lawyers, investment bankers and lawsuits. After six weeks your behavior is not only unacceptable, it is unconscionable.”
Thus CEO Barry Silbert’s silence has really put the Winklevoss twins’ company on edge, and while an open letter seems like a desperate attempt, it is just to give awareness to all those Gemini customers who are waiting for compensation.
In the letter, Cameron Winklevoss goes on to accuse Barry Silbert of hiding.
Anyone who wants to confirm his claim about the proposals made to the company Digital Currency Group can get confirmation because they have been made public:
“The idea in your head that you are hiding in your ivory tower and that all this will magically disappear (or that it is the problem of others) is pure fantasy. To be clear, this mess is entirely your responsibility. DCG – of which you are the founder and CEO – owes Genesis 1.675 billion.
This is money that Genesis owes to Earn users and other creditors. You have taken this money–school teachers’ money–to fund unlimited stock buybacks, illiquid investments, and trades on Grayscale’s NAV by kamikaze that have disproportionately increased the fees generated by your Trust; all at the expense of creditors and all for your own personal gain. Now is the time to take responsibility for this and do the right thing.”
It can be considered the “ultimate hope” of the Winklevoss twins, hopefully leading to results that so far have not been seen. The Cryptonomist will continue to follow the story that has been going on for 50 days now.
