Published
1 year ago on
January 03, 2023
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Co-founder of crypto exchange Gemini Trust Co, Cameron Winklevoss, has accused the CEO of Digital Currency Group (DCG), Barry Silbert, of negotiating in bad faith.
The comments were made in an open letter over funds to the tune of $900 million owed to Gemini as part of the Gemini Earn Program.
Winklevoss Calls Out Silbert
Crypto broker Genesis has been put in a spot of bother since the collapse of FTX. The company’s lending arm had to halt customer withdrawals and owes members of Gemini Earn around $900 million. Now, Cameron Winklevoss, co-founder of Gemini, has accused Genesis and the Digital Currency Group of bad faith and stall tactics, asking him to resolve the $900 million worth of disputed assets by the 8th of January, 2023. Winklevoss wrote the letter after claiming to have been trying to reach a consensus with Silbert for weeks.
“Every time we ask you for tangible engagement, you hide behind lawyers, investment bankers, and process.”
The Open Letter
Seemingly tired of getting nowhere, co-founder of Gemini, Cameron Winklevoss, penned an open letter to the Digital Currency Group founder and CEO, accusing DCG and Silbert of evasive tactics and failing to attempt to resolve the ongoing situation with the funds. Winklevoss stated in the letter that Gemini, on its part, has tried to reach a “consensual resolution” to the dispute with DCG and Genesis over the funds and their return. However, he alleged that Silbert and his companies have been stalling the entire process.
“We appreciate that there are startup costs to any restructuring, and at times things don’t go as fast as we would all like. However, it is now becoming clear that you have been engaging in bad faith stall tactics.”
He also accused Silbert of refusing to “get into a room” with Gemini management, ironing things out, and refusing to agree to any timeline with the company after weeks of trying.
“After six weeks, your behavior is not only completely unacceptable; it is unconscionable. The idea in your head that you can quietly hide in your ivory tower and that this will all just magically go away, or that this is someone else’s problem, is pure fantasy.”
Silbert Fires Back
According to the Winklevoss Twins, DCG owes Genesis around $1.67 billion, citing figures shared by Silvert with investors back in November. This figure also included a $575 million loan which was due in May, and a further $1.1 billion promissory note, tied to the collapse of Three Arrows Capital (3AC). Silbert responded to Winklevoss, refuting the framing around the money owed to Genesis by DCG. He further claimed that DCG had sent a recent proposal to both Genesis and Gemini. Silbert Stated,
“DCG did not borrow $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023. DCG delivered a proposal to Genesis and your advisors on the 29th of December and has not received any response.”
On his part, Winklevoss asked Silbert to publicly commit to resolving the ongoing deadlock by the 8th of January, 2023. However, he did not elaborate on any potential consequences or future action should Silbert not comply.
“There you go again. Stop trying to pretend that you and DCG are innocent bystanders and had nothing to do with creating this mess. It’s completely disingenuous. Will you, or will you not, commit to solving this by the 8th of January in a manner that treats the $1.1 billion promissory note as $1.1 billion?”
The Gemini Earn Program
The Gemini Earn Program is a high-yield savings product, offering users an annual return of up to 8% on their crypto deposits, depending on where the assets in question are held. Genesis was Gemini’s primary lending partner, and when Genesis suspended loan withdrawals, it led to Gemini halting withdrawals for its Earn program as well. Winklevoss has pegged the amount owed to Gemini Earn Customers at $900 million. Back in November, Silbert tried to reassure investors that DCG did not face any immediate risk following FTX’s collapse.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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