Cameron Winklevoss Calls for DCG Board to Sack Barry Silbert
Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, has written an open letter to the Digital Currency Board (DCG) board, asking for the removal of the venture capital firm’s CEO Barry Silbert.
Amid growing tensions between the high-profile executives of DCG and Gemini in the wake of the FTX collapse, Cameron wrote an open letter to the DCG board on Tuesday, accusing the venture capital firm and its daughter company Genesis of defrauding more than 340,000 Gemini and Earn users.
The crypto boss said DCG and its CEO Barry Silbert, as well as other key executives, deceived users by falsely claiming that crypto brokerage Genesis Global Trading, the lending arm of Genesis which is also owned by Digital Currency Group (DCG), was solvent and financially stable. He said:
“They did so in an effort to mislead lenders into believing that DCG had absorbed massive losses that Genesis incurred from the Three Arrows Capital Ltd. (3AC) collapse and induce lenders to continue making loans to Genesis. By lying, they hoped to buy time to dig themselves out of the hole they created.”
In the wake of FTX’s collapse, Genesis announced that it is temporarily suspending redemptions and new loan originations. In a statement on Twitter, Genesis says the “abnormal withdrawal requests” have exceeded its “current liquidity.”
Following the announcement, Gemini Trust Earn, a program that offered high-interest accounts thanks to a partnership with Genesis Global, also halted redemptions in mid-November. Reportedly, around $900 million of Gemini’s customer funds are locked in Genesis.
Notably, this is not the first time Cameron has lashed out at Silbert in an open letter. Just last week, he issued an open letter to Silbert, accusing him of “bad faith stall tactics” and asking him to find a solution by January 8.
While no announcement came from Silbert, Derar Islim, the interim CEO of Genesis, told clients that they need more time to resolve the financial crisis plaguing their lending business. He said:
“While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time. We believe we can arrive at a solution.”
Back in November last year, Silbert tried to reassure investors that they are financially stable, claiming that most of its entities are “operating as usual.” He even said that they are on the pace to generate $800 million in revenue this year on the back of just $25 million raised in primary capital since inception.
Meanwhile, Silbert had previously said on Twitter claiming that DCG delivered a proposal for resolving the dispute to Genesis and Winklevoss’s advisers on December 29, but had received no reply.
DCG did not borrow $1.675 billion from Genesis— Barry Silbert (@BarrySilbert) January 2, 2023
DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023
DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response