The co-founder of cryptocurrency exchange Gemini, Cameron Winklevoss, has accused Digital Currency Group (DCG) CEO Barry Silbert of “bad faith stall tactics” in a dispute over a business disagreement. Winklevoss claims in an open letter that DCG and its subsidiary, crypto broker Genesis Global Capital, owe Gemini’s clients $900 million and that attempts to reach a repayment agreement have been ignored for six weeks. Silbert countered that DCG delivered a proposal on December 29, 2022, to Genesis and Gemini’s advisers and has not received any response. Winklevoss also accused Silbert of using $1.675 billion that he claimed DCG “owes” Genesis for purposes that benefited other DCG ventures rather than repaying creditors.
Silbert denied that DCG borrowed $1.675 billion from Genesis and stated that the company has never missed an interest payment to Genesis and is current on all loans outstanding.
DCG does have a $1.1 billion promissory note related to liabilities from Genesis regarding the Three Arrows Capital default, and Silbert previously mentioned that DCG has a roughly $575 million liability to Genesis Global that is due in May.
This dispute arises as Gemini faces several financial challenges, including a lawsuit against its Earn product alleging fraud and securities law violations and angry customers who have been unable to access their accounts. The Earn product had been offering investors the opportunity to earn up to 8% interest on their cryptocurrency by lending it out to Genesis but was suspended in mid-November after rival exchange FTX filed for bankruptcy and left Genesis with roughly $175 million locked on its platform. Genesis subsequently halted withdrawals and suspended new loan originations, leading creditors to work with restructuring lawyers to prevent insolvency.