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In an open letter, Gemini lashes out against DCG in public
Cameron Winklevoss, the co-founder of Gemini, posted an open letter on social media this Monday in an attempt to attract Barry Silbert’s, the CEO of Digital Currency Group (DCG), attention. In a statement published on Twitter, Cameron Winklevoss criticized Barry Silbert for using “bad faith stall tactics.”
In the letter, Winklevoss claims to have written on account of 340 thousand Gemini Earn customers. Briefly, Genesis Global Capital’s lending arm had been a significant partner, allowing Gemini to offer to Earn users up to 8% percent on certain digital assets.
Earn Update: An Open Letter to @BarrySilbert pic.twitter.com/kouAviTho4
— Cameron Winklevoss (@cameron) January 2, 2023
Genesis which is a lender of FTX bankruptcy procedures was affected by the FTX contagion, and the company’s lending business stopped accepting withdrawals and approving new loans in the middle of November 2022.
Genesis was an important collaborator on Gemini’s Earn product, however, it also stopped withdrawals during that week. Then, according to a report in the Financial Times (FT), Genesis owes Gemini Earn customers $900 million.
In order to recover the money through Genesis, Gemini also established a creditors committee that involves Houlihan Lokey serving as its financial advisor.
Winklevoss, alleges that the CEO of Digital Currency Group (DCG) has not yet repaid the $900 million that was provided to its virtual commodity prime brokerage subsidiary as part of the Gemini Earn scheme.
Possible strict action against Gemini is also being prepared by disgruntled consumers who accuse the company of deceiving them by offering a substandard deal. Winklevoss asserts within the letter that his group attempted to resolve the conflict with Silbert on Christmas day, as well as at other times. In the letter, Winklevoss claims that DCG owes Genesis $1.675 billion, claiming that the situation is a disaster “entirely of your own making.”
Winklevoss asserts that Silbert resisted his attempts to converse with him on a number of occasions, most notably on Christmas Day. The Wall Street Journal stated on November 22, 2022, that Silbert wrote to investors stating that Genesis had due $575 million by DCG and needed to pay this money back by May 2023. In addition, a $1.1 billion worth promissory note was also due in June 2023.
After Winklevoss posted his tweet, the CEO of DCG addressed the allegations. An article suggesting Grayscale Investments, a DCG affiliate, potentially offering investors a tender offering if the Bitcoin Trust’s ETF objectives don’t succeed was shared in the DCG executive’s final tweet on December 19, 2022.
Winklevoss’s assertive position on the subject is probably the result of mounting investor and consumer pressure as well as recent legal actions alleging that the platform is offering interest-bearing crypto products.