Gemini crypto exchange co-founder Cameron Winklevoss called for the board of Digital Currency Group to remove Barry Silbert as chief executive officer, in the latest twist of a running dispute with a onetime business partner.
(Bloomberg) — Gemini crypto exchange co-founder Cameron Winklevoss called for the board of Digital Currency Group to remove Barry Silbert as chief executive officer, in the latest twist of a running dispute with a onetime business partner.
Some 340,000 Gemini users earned interest on lending out their crypto through Genesis, a unit of DCG. They are now unable to access about $900 million in funds after Genesis stopped reimbursements in November amid contagion from the bankruptcy of the FTX exchange.
Creditors including Gemini have been working behind the scenes to find a solution for nearly two months. On Jan. 2, Winklevoss issued his first open letter to Silbert on Twitter, accusing him of “bad faith stall tactics” and asking him to commit to a resolution by Jan. 8. That day came and went with no announcements.
In a new letter published Tuesday, also on Twitter, Winklevoss accused Silbert of repeatedly misrepresenting Genesis’s financial position, publicly as well as to Gemini’s employees. Silbert “has proven himself unfit to run DCG and unwilling and unable to find a resolution with creditors that is both fair and reasonable,” Winklevoss wrote.
Responding to the letter in a tweet of its own, DCG described it “as another desperate and unconstructive publicity stunt from Cameron Winklevoss to deflect blame from himself and Gemini, who are solely responsible for operating Gemini Earn and marketing the program to its customers.” The company added that it is “preserving all legal remedies in response to these malicious, false, and defamatory attacks” and “will continue to engage in productive dialogue with Genesis and its creditors with the goal of arriving at a solution that works for all parties.”
Separately, Gemini sent an update to users on Tuesday, informing them that it had terminated its master loan agreement with Genesis Global Capital, a move that it says “officially terminates” the Earn program and requires Genesis to return all assets outstanding. Gemini added that the termination of the loan agreement does not impact its “ability to pursue a resolution for you to recover your assets.”
“While we obviously do not agree with everything that Gemini has said, and we are disappointed that Gemini is waging a public media campaign despite ongoing productive private dialogue between the parties, we remain focused on finding a solution for our borrowing and lending intermediation business and reaching the best outcome for all affected Genesis lending and Gemini Earn clients,” said a Genesis spokesperson in an emailed statement. The spokesperson added that “this is a very complex process that will take some additional time, but we are committed to moving as quickly as possible. We believe we can arrive at a solution.”
Silbert responded via Twitter to Winklevoss’s Jan. 2 letter, claiming that DCG delivered a proposal for resolving the dispute to Genesis and Winklevoss’s advisers on Dec. 29, but had received no reply. He also refuted accusations that DCG owed Genesis $1.675 billion, which it used for other business purposes within Silbert’s conglomerate. “DCG did not borrow $1.675 billion from Genesis” and “never missed an interest payment to Genesis and is current on all loans outstanding,” Silbert said. Silbert couldn’t immediately be reached to respond to the latest letter.
Gemini in November paused redemptions on the lending product, called Earn, that used Genesis. The firm and Genesis are among a range of crypto outfits buffeted by the collapse of FTX, which imploded with an $8 billion hole in its balance sheet.
–With assistance from Vildana Hajric.
(Updates with additional response from Genesis characterizing the Winklevoss letter as a public media campaign. A prior version referred to “misleading public statements.”)
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