Cameron Winklevoss, who co-founded crypto exchange Gemini Trust Co. with his twin brother Tyler Winklevoss, has accused Digital Currency Group’s (DCG) CEO Barry Silbert of “bad faith stall tactics,” asking him to resolve matters related to $900 million worth of disputed customer assets by January 8, 2023. The heated back and forth between the two individuals happened on Twitter on Monday at a time when investors are already concerned about the credibility of the crypto market following the FTX fiasco.
Genesis Global Capital, the lending arm of Genesis Global Trading (a unit of Silbert’s DCG), halted loan originations and redemptions on November 16, 2022, due to its inability to meet clients’ withdrawal requests. Following this, Winklevoss’ Gemini Trust paused redemptions on a lending product called Earn, which offered investors the opportunity to get as much as 8% in interest on their digital coins by lending them to Genesis.
War of Words on Twitter
In an open letter to Silbert on Twitter, Winklevoss said that Gemini and other Genesis creditors approached Silbert with multiple proposals to resolve the issue, including the one delivered on December 25. Winklevoss wrote that DCG owed Genesis $1.675 billion, money that Genesis in turn owed to Earn users and other creditors. Winklevoss said he was writing on behalf of 340,000 Earn users, to whom Genesis owed over $900 million. He accused Silbert, saying, “this mess is entirely of your own making.”
The accusations come at a time when Gemini and Winklevoss brothers are being sued by investors, alleging fraud and violations of securities laws.
In response to Winklevoss’ letter, Silbert tweeted that DCG did not borrow the mentioned amount from Genesis and has “never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023.” Silbert further added that DCG delivered a proposal for resolving the dispute to Genesis and Winklevoss’ advisors on December 29, 2022, but did not receive any reply.
Cameron Winklevoss called Silbert’s response “completely disingenuous.” He further added, “Will you, or will you not, commit to solving this by January 8th in a manner that treats the $1.1 billion promissory note as $1.1 billion?”
Overall, such disputes will further shake the faith of crypto investors. In 2022, Bitcoin (BTC-USD) plunged as investors shied away from risky assets like crypto amid rising interest rates and macro pressures. The FTX collapse further dragged down Bitcoin and crypto stocks. All in all, Bitcoin fell about 65% in 2022.