Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, has written an open letter to the board of Digital Currency Group, or DCG, stating that CEO Barry Silbert is “unfit” to lead the company.
In a letter dated January 10, Winklevoss affirmed that Silbert and Genesis Global Capital—an affiliate of DCG—had defrauded more than 340,000 users who were part of Gemini’s Earn program. The letter followed a Jan. 2 call on Twitter to Silbert directly, in which the Gemini co-founder said Genesis owed Gemini $900 million, accusing the CEO of hiding “behind lawyers, investment bankers and process.”
According to Winklevoss, Genesis lent more than $2.3 billion to Three Arrows Capital, a move that ultimately left the crypto firm with a $1.2 billion loss once the hedge fund failed in June 2022.. He claimed that Silbert, DCG, and Genesis orchestrated “a carefully crafted campaign of lies” beginning in July 2022 in an effort to prove that DCG had pumped the funds into Genesis by listing a 10-year note as part of its assets.
Winklevoss alleged that Genesis CEO Michael Moro was complicit in this duplicity, issuing “false and misleading” statements on social media regarding DCG providing capital to Genesis. He further claimed that certain DCG personnel had worked behind the scenes to cover up the lack of “adequate capitalization” at Genesis.
According to the Gemini co-founder, any accounting irregularities DCG and Silbert had been a part of could have been overlooked if FTX hadn’t gone under in a matter of months. It alleged that there were “recursive trades” between Three Arrows and Grayscale Bitcoin Trust in what it called “effective swap transactions” for Genesis of Bitcoin (BTC) for GBTC, a move that Genesis ended up losing out on and which it failed to properly disclose in its balances.
“These misrepresentations […] they were a sleight of hand designed to make it appear that Genesis was creditworthy and capable of meeting its obligations to the lenders, without DCG actually committing the financial support necessary to make this true. DCG wanted to have their cake and eat it too.”
Earn Update: An Open Letter to the Board of @DCGco pic.twitter.com/eakuFjDZR2
— Cameron Winklevoss (@cameron) January 10, 2023
Contrary to his January 2 letter, Winklevoss directly asked the DCG board to remove Silbert in an effort to offer a solution to Earn users. In response to that letter, Silbert he claimed that “DCG did not borrow $1.675 million from Genesis” and that it “never failed to pay interest to Genesis and is current on all outstanding loans.”
“There is no way forward as long as Barry Silbert remains CEO of DCG,” Winklevoss said. “You have demonstrated your ineptness to run DCG and your unwillingness and inability to find a solution with creditors that is fair and reasonable. As a result, Gemini, acting on behalf of 340,000 Earn users, requests that the Board remove Barry Silbert as CEO.”
Cointelegraph reached out to Barry Silbert but did not hear back as of press time.
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