Gemini co-founder claims DCG acted in bad faith; DCG CEO had this to say
- Gemini co-founder Cameron Winklevoss stated that DCG’s Barry Silbert has been acting in bad faith.
- However, Gilbert refuted the allegations and claimed that he has been cooperating with Gemini.
Cameron Winklevoss, the co-founder of crypto exchange Gemini, has turned up the heat on Barry Silbert, the man behind the Digital Currency Group.
A sensational open letter shared by Winklevoss on Twitter on 2 January made allegations against the DCG chief’s conduct in light of the liquidity issues plaguing his crypto empire.
— Cameron Winklevoss (@cameron) January 2, 2023
Stall tactics in bad faith against Gemini?
Cameron Winklevoss alleged that Barry Silbert and DCG have engaged in stall tactics ever since Genesis Global Capital, a wholly owned crypto trading platform, halted withdrawals back in November 2022.
The repayment of a whopping $900 million to Gemini’s Earn customers and other creditors is the issue at the center of this dispute. Winklevoss claimed that he and his firm collaborated and acted in good faith to reach a solution, but Silbert has not been cooperative.
In his letter, Winklevoss deposed,
“You continue to get into a room with us to hash out a solution. In addition, you continue to refuse to agree to a timeline with key milestones. Every time Every time we ask you for tangible engagement, you hide behind lawyers, investment bankers and process.”
Cameron Winklevoss further alleged that Barry Silbert took $1.67 billion from Genesis to fund share buybacks, make investments in illiquid ventures and make Grayscale trades that boosted his assets under management (AUM).
Barry Silbert’s response to allegations
Within an hour of Winklevoss’s tweet, Digital Currency Group CEO Barry Silbert responded to the allegations made against him. Silbert clarified that DCG had never borrowed $1.67 billion from its subsidiary Genesis.
Winklevoss countered by arguing that the transfer was made through a promissory note.
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 to Genesis and your advisors a proposal on December 29th and has not received any response
— Barry Silbert (@BarrySilbert) January 2, 2023
Silbert revealed that his firm had never missed an interest payment to Genesis, with the next loan maturing in May 2023. He further alleged that DCG had, in fact, responded to Gemini’s proposal on 29 December 2022 and was waiting for a response.
Meanwhile, three Gemini Earn users have filed a demand for class arbitration against Genesis Global Capital and DCG. The class action arbitration represents claimants seeking the return of digital assets and damages for breach of contract and the unregistered sale of securities.