According to an open letter from the Co-founder, there were Questionable trades between the Grayscale Bitcoin Trust and the Three Arrows Capital hedge Fund.
Cameron Winklevoss, co-founder of the cryptocurrency exchange Gemini, has written an open letter to the board of Digital Currency Group, or DCG, saying CEO Barry Silbert was “unfit” to run the company.
In a Jan 10. letter, Winklevoss claimed Silbert and Genesis Global Capital — a subsidiary of DCG — had defrauded more than 340,000 users who were a piece of Gemini’s Earn program. The letter followed a Jan. 2 allure on Twitter to Silbert straightforwardly, in which the Gemini co-founder said Genesis owed Gemini $900 million, blaming the CEO for stowing away “behind lawyers, investment bankers, and process.”
According to Winklevoss, Genesis lent more than $2.3 billion to Three Arrows Capital, a move which ultimately left the crypto firm with a deficiency of $1.2 billion once the hedge fund bombed in June 2022. He claimed Silbert, DCG, and Genesis orchestrated “a painstakingly created mission of untruths” beginning in July 2022 with an end goal to show DCG had infused the funds into Genesis by including a 10-year promissory note as a component of its assets.
Winklevoss alleged Genesis CEO Michael Moro was complicit in this duplicity, by issuing “false and misleading” statements on social media in regards to DCG giving capital to Genesis. Moreover, he claimed specific DCG faculty had worked behind the scenes to cover the absence of “adequate capitalization” at Genesis.
According to the Gemini co-founder, any accounting irregularities of which DCG and Silbert had been a section could have been overlooked had FTX not collapsed inside a matter of months. He alleged there were “recursive trades” between Three Arrows and the Grayscale Bitcoin Confidence in what he called “really trade transactions” for Genesis of Bitcoin for GBTC — a move wherein Genesis in the end lost and didn’t adequately report on its monetary records.
“These misrepresentations […] were a skillful deception intended to cause it to show up as though Genesis was dissolvable and ready to meet its obligations to lenders, without DCG really committing to the financial help important to make this valid. DCG needed to have it both ways.”
A DCG representative considered the letter a “desperate and unconstructive exposure stunt,” guaranteeing Winklevoss and Gemini were “exclusively liable for operating Gemini Earn and marketing the program to its customers.” The firm recommended it could seek after legal activity if vital.
In contrast to in his Jan. 2 letter, Winklevoss straightforwardly approached the DCG board to remove Silbert with an end goal to give a resolution to Earn users. Because of that letter, Silbert claimed “DCG didn’t borrow $1.675 billion from Genesis” and “never missed an interest payment to Genesis and is current on all credits extraordinary.”
As long as Barry Silbert remains CEO of DCG, there is no path forward. “He has substantiated himself unfit to run DCG and reluctant and incapable to find a resolution with creditors that is both fair and sensible. Subsequently, Gemini, following up in the interest of 340,000 Earn users, demands that the Board remove Barry Silbert as CEO.”