Gemini’s Cameron Winklevoss has accused DCG’s Barry Silbert of stalling on repaying a Genesis loan. Winklevoss said Genesis, the lending arm of DCG, owes $900 million to the crypto exchange’s clients. Silbert disputed the claims made by Winklevoss in a spat that could again dent faith in crypto, post-FTX. Loading Something is loading.
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Gemini cofounder Cameron Winklevoss has blasted Digital Currency Group CEO Barry Silbert, accusing him of acting in bad faith by stalling on resolving a dispute with Genesis over nearly $1 billion in customers’ crypto funds.
Winklevoss kicked off a Twitter spat by publishing an open letter to Silbert on Monday, claiming DCG and its crypto lending arm Genesis are dragging their heels on a deal to return the frozen $900 million they owe to users of Gemini’s Earn program.
“For the past six weeks, we have done everything we can to engage with you in a good faith and collaborative manner in order to reach a consensual resolution for you to pay back the $900 million that you owe,” wrote Winklevoss, who runs the crypto exchange with his twin brother Tyler.
“However, it is now becoming clear that you have been engaging in bad faith stall tactics,” he added, calling on Silbert to commit to a resolution by Sunday.
The public dispute between two major crypto businesses threatens to further undermine faith in the sector after the FTX implosion rocked the entire crypto industry and exposed firms to trouble.
Gemini offers its customers up to 7.4% interest if they lend it their crypto holdings, which it then lends out to partners such as crypto broker Genesis.
But in November, Genesis halted client withdrawals after the sudden collapse of Sam Bankman-Fried’s FTX empire. DCG’s crypto broker had outstanding loans to FTX’s trading arm Alameda Research, The Wall Street Journal reported.
Winklevoss said DCG owes its Genesis subsidiary $1.675 billion, a chunk of which is essentially money the broker owes to Gemini creditors. Those Gemini customers’ funds were used by DCG to “fuel greedy share buybacks” and “illiquid venture investments,” he said.
The accusations triggered a response from Silbert, who pushed back on the claims.
“DCG did not borrow $1.675 billion from Genesis,” Silbert tweeted. “DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023.”
He added that DCG had delivered a proposal to Gemini’s representatives on Thursday but never heard back from them.
Meanwhile, Gemini and the Winklevoss twins are being sued for fraud by investors over the Earn Program’s interest-bearing products. The program was abruptly halted in November, and that effectively wiped out customers who still had accounts, their complaint said.
Gemini, DCG and Genesis did not respond to Insider’s request for comment.