Gemini’s Cameron Winklevoss accuses crypto chief Barry Silbert of ‘bad faith’ for freezing frozen funds

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By Mike Murphy

Cameron Winklevoss, co-founder of crypto exchange Gemini Trust Co., lambasted Digital Currency Group CEO Barry Silbert on Monday, accusing him of “bad faith stall tactics” on nearly $1 billion. of client crypto assets that have been frozen for more than a month.

In an open letter posted on Twitter, Winklevoss alleged that DCG and its crypto-brokerage unit Genesis Global Capital owed more than $900 million to users of Gemini’s Earn program.

Under Gemini Earn, investors lent Gemini crypto assets in exchange for high interest payments. Gemini then loaned the digital assets to Genesis. But Genesis halted all withdrawals and transactions in early November due to its exposure to bankrupt crypto platform FTX, causing a liquidity crunch for Gemini.

Investors last week sued Gemini, along with Winklevoss and her twin brother, Tyler, accusing them of fraud and selling interest-bearing accounts without registering them as securities.

In his Monday letter, Cameron Winklevoss claimed that Silbert repeatedly refused over the past six weeks “to come into a room with us to work out a resolution” to establish a repayment schedule. DCG has already distanced itself from Genesis and its lending business.

“This mess is completely your fault,” Winklevoss said, alleging DCG owes Genesis $1.675 billion. “It’s money that Genesis owes Earn users and other creditors,” Winklevoss said, alleging that DCG used those funds for other purposes, including “greedy stock buybacks, illiquid venture capital investments and kamikaze Grayscale NAV transactions”.

Grayscale Investments is also a unit of DCG, and its largest investment vehicle is the Grayscale Bitcoin Trust (GBTC).

In a tweeted response on Monday, Silbert denied both that DCG had borrowed $1.675 billion from Genesis and that he had missed an interest payment to Genesis, and said he was current on all outstanding loans. Classes. He added: “DCG delivered a proposal to Genesis and your advisers on December 29 and received no response.”

Winklevoss replied that Silbert was “dishonest”.

Ram Ahluwalia, CEO of digital asset investment adviser Lumida Wealth Management, tweeted on Monday that “it’s a game of chicken now” and predicted that soon “DCG will be in a state of ‘indentured servitude’ with its creditors. – including its Genesis subsidiaries.”

-Mike Murphy

(END) Dow Jones Newswire

01-02-23 1730ET

Copyright (c) 2023 Dow Jones & Company, Inc.

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