Winklevoss Calls On DCG To Take Fire Chief For Crypto Debts

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Cameron Winklevoss has called on the board of conglomerate Digital Currency Group to oust its chief executive, in a growing row over debts stemming from last year’s FTX crypto shock.

In a second open letter published on Tuesday, Winklevoss, who runs crypto exchange Gemini with his twin brother Tyler, repeated his call for DCG boss Barry Silbert to pay off debts, including $900 million from Gemini client funds blocked in one of DCG’s units. Cameron had given Silbert a January 8 deadline to commit to resolving the issue.

The demands for cash underscore how the collapse of crypto exchange FTX last year continues to hurt the tightly knit network of high-profile companies and individuals in this self-proclaimed decentralized marketplace.

DCG did not immediately respond to a request for comment on the letter.

The conglomerates’ problems stem from its subsidiary Genesis, a crypto broker, which allowed clients to loan out their coins for high returns. After FTX collapsed in November, Genesis suspended client withdrawals, including some funds from Gemini, and hired Moelis investment bankers to help explore its options.

Last week, Silbert said DCG had not received a response to its own proposals to Winklevoss and other creditors, including Dutch exchange Bitvavo and crypto savings company Donut.

In a new public letter on the matter released on Tuesday, Cameron called on the group’s board to fire Silbert immediately. The Winklevoss twins do not own a stake in DCG, which limits their ability to force Silberts’ hand.

The DCG’s network of intra-company loans and investments, previously revealed by the Financial Times, further complicated the situation for creditors.

The main issue is a $1.1 billion promissory note that DCG issued directly to Genesis when it assumed brokerage responsibilities following the collapse of crypto hedge fund Three Arrows Capital in the summer. 2022. It matures, delivering the money to Genesis, in 2032.

Cameron Winklevoss wrote on Tuesday that DCG did not give Genesis a penny of actual funding, saying the promissory note did nothing to improve Genesis’ immediate liquidity position or make its balance sheet solvent.

DCG attempted to raise funds by cutting costs, including Genesis laying off 30% of its staff.

The New York-based group was founded in 2015 by Silbert and is one of the industry’s largest and earliest investors in crypto tokens and ventures.

DCG’s board includes several prominent investors, including Lawrence Lenihan, co-founder of venture capital firm FirstMark Capital. Glenn Hutchins, co-founder of private equity group SilverLake, resigned from the board in November, according to people familiar with the matter. He declined to comment. Former US Treasury Secretary Larry Summers was also an adviser to the DCG on macroeconomic issues, a role he also stepped down from in recent days.

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