Gemini's Cameron Winklevoss Calls for Barry Silbert's Ouster From Crypto Conglomerate DCG
Winklevoss, on behalf of Gemini, called for Silbert's removal for his involvement in the disagreement between Genesis and its creditors.
Cameron Winklevoss, the co-founder of crypto exchange Gemini, issued an open letter on Tuesday calling for the ouster of Digital Currency Group (DCG) CEO Barry Silbert because a DCG division's November decision to halt withdrawals leaves owners of Gemini's crypto yield product in limbo.
Winklevoss asked the DCG board to remove Silbert, citing DCG's inability to find a fair resolution with creditors of DCG's Genesis unit.
DCG, which is also the parent company of CoinDesk, didn't immediately respond to CoinDesk's request for comment, but the company tweeted on Tuesday that "this is another desperate and unconstructive publicity stunt from @cameron to deflect blame from himself and Gemini, who are solely responsible for operating Gemini Earn and marketing the program to its customers."
DCG further noted that "we are preserving all legal remedies in response to these malicious, fake, and defamatory attacks."
Gemini, which was founded by twin brothers Cameron and Tyler Winklevoss, partnered with crypto trading firm Genesis to offer the yield product Gemini Earn. On Nov. 16, Genesis announced its lending business would be halting withdrawals, which then affected Gemini Earn customers' ability to access their funds.
Cameron Winklevoss and Silbert had traded verbal blows last week over the ongoing dispute over crypto lender Genesis, which is facing a crisis due to the industry turmoil caused by the FTX exchange's implosion and the blowup earlier in 2022 of crypto hedge fund Three Arrows Capital (3AC).
In the letter, Winklevoss alleged that DCG and Genesis "pretended to" plug the $1.2 billion hole left in Genesis' lending business by 3AC's collapse in July.
Winklevoss went on to allege that the companies committed "accounting fraud" by misrepresenting the bailout on Genesis' balance sheet under "current assets" (which commonly refers to cash and cash equivalents). Instead, DCG's payment to Genesis was in the form of a 10-year promissory note at 1% interest, which was worth only $300 million at face value, according to Winklevoss.
"These misrepresentations were a sleight of hand designed to make it appear as if Genesis was solvent and able to meet its obligations to its lenders, without DCG actually committing to the financial support necessary to make it true," wrote Winklevoss.
UPDATED Jan. 10, 2023 15:30 UTC. Adds more detail from Winklevoss's claims.
UPDATED Jan. 10, 2023 16:57 UTC. Adds DCG's response on Twitter.
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