Gemini Co-founder Cameron Winklevoss, writes an open letter, the second one in the last 10 days, but this time asking for the removal of Barry Silbert as CEO of Digital Currency Group (DCG).
Winklevoss called out Silbert by saying “He has proven himself unfit to run DCG and unwilling and unable to find a resolution with creditors that is both fair and reasonable.”
Winklevoss claimed Genesis, DCG, Barry Silbert, defrauded Gemini and more than 340,000 Earn users. These parties reportedly banded together to misrepresent Genesis’ solvency and financial stability to Gemini, Earn users, other lenders, and the general public.
Winklevoss claimed that DCG-owned Genesis had provided Three Arrow Capital $2.36 billion in assets (3AC). Genesis stated that when collateral was liquidated, it suffered a loss of at least $1.2 billion.
“At this point, Barry Silbert had two legitimate options: restructure the Genesis loan book (inside or outside of bankruptcy court) or fill the $1.2 billion hole. He did neither,” the Gemini Co-founder emphasized.
DCG then “crafted campaign of lies” to make Gemini, Earn users, and other lenders believe that they had injected $1.2 billion of actual support into Genesis.
Michael Moro, then-CEO of Genesis gave a statement on Twitter that, “DCG has assumed certain liabilities of Genesis related to [3AC] to ensure we have the capital to operate and scale our business for the long-term.” But this statement by Michael Moro was “false and misleading.”
Winklevoss noted DCG hadn’t given Genesis actual funding to make up for the 3AC losses. Instead, DCG entered into a 10-year promissory note with Genesis at an interest rate of 1% -due in 2032.
This note “did nothing to improve Genesis’s immediate liquidity position or make its balance sheet solvent (more on this later).” the letter reads.
He further went on to claim that 3AC was acting as a mere conduit for Genesis, allowing it to enter into what were effectively swap transactions of bitcoin for GBTC shares with the Grayscale Trust.
DCG CEO Barry Silbert later put out a statement addressing the concerns “I’ve been reflecting quite a bit about the past year, the state of the industry and where things go from here.”
According to Silbert, 3AC and Genesis had a trading and lending connection, and 3AC defaulted on its loans from Genesis. However, DCG has never had a relationship with 3AC. 3AC invested in numerous Grayscale products separately.