• Cameron Winklevoss has released a letter alleging that Genesis and its parent company, Digital Currency Group (DCG), have defrauded Gemini and more than 340,000 Gemini Earn users.
• The letter claims that after Genesis Global Capital LLC, Genesis Trading’s $2.8 billion crypto lending arm, realized losses of at least $1.2 billion, the fund tried to defraud others into believing that $1.2 billion of working capital had been injected into the company.
• The letter alleges that greed has driven the investment decisions which have resulted in the loss of Gemini Earn users’ funds, and concludes with a paragraph which reads, “There is no path forward as long as Barry Sibert remains CEO of DCG. He has proven himself unfit to run DCG and unwilling and una
Cameron Winklevoss, the Co-Founder of Gemini, has recently released an extensive letter which makes a number of allegations against Genesis and its parent company, Digital Currency Group (DCG). In the letter, Winklevoss alleges that the companies have defrauded Gemini and more than 340,000 Gemini Earn users.
According to the letter, Genesis Global Capital LLC, Genesis Trading’s $2.8 billion crypto lending arm, realized losses of at least $1.2 billion after the collapse of cryptocurrency hedge fund Three Arrows Capital. Instead of taking action to restructure and protect users, the fund allegedly tried to defraud others into believing that $1.2 billion of working capital had been injected into the company. This was done, the letter claims, by marking a 10-year promissory note down as a current asset, which normally “refers to cash, cash equivalents, or other assets that can be exchanged into cash within one year,” according to the letter. However, Winklevoss writes that, “A promissory note with a principal repayment due in 10 years falls outside the definition of a ‘current asset’ by a country mile.”
The letter also describes how Genesis was allegedly lending to Three Arrows Capital without regard to the risk of these loans, as the crypto hedge fund was apparently redirecting investment into Grayscale Investments’s GBTC, which limited the growing discount of the Trust. This risk was then passed on to the users of Gemini Earn.
Winklevoss ultimately claims that greed is what has driven these investment decisions and, as a result, the loss of Gemini Earn users’ funds. The letter concludes with a paragraph which reads, “There is no path forward as long as Barry Sibert remains CEO of DCG. He has proven himself unfit to run DCG and unwilling and unable to make the changes necessary to protect users.”
In sum, the letter from Cameron Winklevoss alleges that Digital Currency Group and its subsidiary, Genesis, have defrauded Gemini and more than 340,000 Gemini Earn users. The letter claims that the companies have attempted to defraud others by marking a 10-year promissory note down as a current asset, and have taken risks with lending to Three Arrows Capital without regard to the consequences. Winklevoss claims that these decisions have been driven by greed, and concludes the letter by calling for the removal of Barry Silbert as CEO of DCG due to his alleged unsuitability and unwillingness to make necessary changes.