DCG's Barry Silbert Talks About Genesis in Letter to Shareholders

Crypto exchange Gemini co-founder Cameron Winklevoss earlier on Tuesday called for the DCG board to remove Silbert as CEO.

AccessTimeIconJan 10, 2023 at 7:03 p.m. UTC
Updated May 9, 2023 at 4:05 a.m. UTC

Barry Silbert, the head of crypto conglomerate Digital Currency Group (DCG), gave his shareholders more details about his company's Genesis Capital lending division that was forced to halt customer withdrawals in the aftermath of FTX's November collapse.

Writing in a letter to investors, Silbert (whose firm owns crypto trading firm Genesis, asset manager Grayscale, CoinDesk and other companies) said that "this past year has been the most difficult of my life – both personally and professionally. Bad actors and repeated blow-ups have wreaked havoc on our industry, with ripple effects extending far and wide."

He noted DCG has cut jobs and is winding down its crypto asset manager HQ.

In a Q&A section, Silbert waded into the controversy around Genesis and its customer Gemini, the crypto exchange founded by the Winklevoss twins. Genesis' lending arm halted withdrawals in November, which locked up funds belonging to investors in Gemini's Earn product, leaving Gemini scrambling to figure out how to get money back to its customers.

Gemini raised the temperature in the fight this week, calling for Silbert to step down as CEO of DCG and officially canceling the Gemini Earn program. Gemini has raised questions about the movement of money between Genesis and DCG.

In his letter Tuesday, Silbert said DCG has borrowed from Genesis Capital, but "these loans were always structured on an arm's length basis and were priced at prevailing market interest rates." Silbert said DCG has a $1.1 billion promissory note maturing in 2032 with Genesis Capital, which arose from DCG assuming its subsidiary's bankruptcy claim against crypto hedge fund Three Arrows Capital. DCG, according to the letter, also owes the subsidiary $447.5 million (of actual U.S. dollars, not crypto) borrowed between January and May 2022 at interest rates of 10% to 12%, plus 4,550 bitcoin (BTC), worth about $78 million.

As for DCG's role in Genesis Capital attempting to restructure, Silbert said: "Because of the outstanding loans and the promissory note that DCG owes to Genesis Capital, DCG executives, including those on the Genesis board, have no decision-making authority related to any restructuring of Genesis Capital."


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Nick Baker

Nick Baker is CoinDesk’s deputy editor-in-chief and a Loeb Award winner. His crypto holdings are below CoinDesk's $1,000 disclosure threshold.