Genesis owes $900 million to cryptocurrency exchange Gemini. The CEO of Gemini, Cameron Winklevoss, and that of DCG – the parent company of Genesis – Barry Silbert have waged a war from a distance through the media.
Why is this important?The FTX case was a real earthquake in the crypto world. Even certain values, such as Bitcoin, could not escape him. A new scandal, worth nearly a billion dollars, broke earlier this year and is intimately linked to FTX.
News: The CEOs of Gemini and Genesis are engaged in an all-out war.
- Mr. Winklevoss started the controversy on Twitter by posting an open letter to Mr. Silbert on Monday, claiming that DCG and its cryptocurrency lending subsidiary Genesis are dragging things out to restore the 900 million dollars frozen that users of Gemini’s Earn program owe.
- “Over the past six weeks, we’ve done everything we can to engage with you in good faith and collaboratively to reach an amicable resolution to get you back the $900 million you owe,” writes Cameron Winklevoss, who runs Gemini with her twin brother Tyler, in an open letter to Barry Silbert.
- According to Winklevoss, DCG owes its subsidiary Genesis $1.67 billion. The majority is basically money that the broker owes Gemini’s creditors. The funds of these Gemini clients were used by DCG “to fuel greedy share buybacks and illiquid venture investments,” the open letter reads.
- Silbert has not remained indifferent to these allegations, to say the least. The latter tweeted in response that “DCG has not borrowed $1.67 billion from Genesis” and that “DCG has never missed an interest payment to Genesis and is up to date on all outstanding loans. Classes; the next loan due date is May 2023.” He concluded his tweet by saying that “DCG had presented a proposal to Gemini representatives on Thursday, but never heard back from them.”
The context : The public dispute between these two major cryptocurrency firms threatens to further undermine confidence in the industry after the FTX bankruptcy rocked the entire industry.
- Gemini offers its customers up to 7.4% interest if they lend them their cryptocurrencies. It then lends these holdings to partners like cryptocurrency broker Genesis. But in November, Genesis stopped customer withdrawals after the FTX empire suddenly collapsed.
- According to Wall Street JournalDCG’s cryptocurrency brokerage had outstanding loans with Alameda Research, the investment fund of FTX CEO Sam Bankman-Fried.
- Gemini and the Winklevoss twins are being sued for defrauding investors on earnings products from the Earn program. The program was abruptly terminated in November, effectively deleting customers who still had accounts, according to their complaint.