Cameron Winklevoss, co-founder of the crypto exchange Gemini Trust Co., has vented his frustration at Digital Currency Group CEO Barry Silbert, accusing him of “bad faith stalling tactics” in regard to over $1 billion in client crypto assets that have been kept frozen for more than a month.
In a letter published on Twitter, Winklevoss implicated DCG and its cryptocurrency brokerage subsidiary Genesis Global Capital, alleging that users of the site owe the pair more than $900 million through Gemini’s Earn program.
Under Gemini Earn, investors could lend crypto assets to Gemini in exchange for high-interest payments. The digital assets were then loaned to Genesis. However, in early December, all withdrawals were halted and trading was stopped due to Genesis’s exposure to the failing cryptocurrency platform FTX causing a liquidity crisis.
Investors subsequently filed a lawsuit against Gemini and the Winklevoss twins, accusing them of fraud and selling interest-bearing accounts without having them registered as securities.
In his letter on Monday, Cameron Winklevoss alleged that for the past six weeks, Silbert had repeatedly refused to “go into a room with us to discuss a resolution” to set up a payment plan. DCG had previously distanced themselves from Genesis and its loan business.
“This mess is entirely of their own making,” Winklevoss claimed, alleging that DCG is owed $1.675 billion. “This is money that Genesis owes to Earn users and other creditors,” he said, adding that the funds were used for other purposes such as “greedy stock buybacks, illiquid venture investments and kamikaze Grayscale NAV transactions”.
Grayscale Investments, which is owned by DCG, making it its largest investment vehicle, manages the Grayscale Bitcoin Trust (GBTC),
In a response tweeted on Monday, Silbert denied DCG had borrowed $1.675 million from Genesis and failed to pay interest, asserting that it was current on all outstanding loans. He added: “DCG gave Genesis and its advisers a proposal on December 29 and has received no response.”
Winklevoss answered that Silbert was being “phony”.
Ram Ahluwalia, CEO of Digital Asset Investment Advisor Lumida Wealth Management, tweeted on Monday that “It’s a chicken game now”, and predicted that soon DCG will be in a state of “bondage by contract” to its creditors, including its Genesis subsidiary.
