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Crypto: Gemini’s Cameron Winklevoss accuses crypto exec Barry Silbert of ‘bad faith’ stalling over frozen funds

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Cameron Winklevoss, co-founder of crypto exchange Gemini Trust Co., lashed out at Digital Currency Group CEO Barry Silbert on Monday, accusing him of “bad faith stall tactics” over nearly a billion dollars’ worth of customers’ crypto assets that have been frozen for more than a month.

In an open letter posted on Twitter, Winklevoss alleged that DCG and its crypto-brokerage unit Genesis Global Capital owes more than $900 million to users of Gemini’s Earn program.

Under Gemini Earn, investors lent Gemini crypto assets in exchange for high interest payments. Gemini then lent the digital assets to Genesis. But Genesis halted all withdrawals and transactions in early November because of its exposure to bankrupt crypto platform FTX, causing a liquidity crisis for Gemini.

Last week, investors sued Gemini, as well as Winklevoss and his twin brother, Tyler, accusing them of fraud and of selling interest-bearing accounts without registering them as securities.

In his letter Monday, Cameron Winklevoss claimed Silbert has repeatedly refused over the past six weeks “to get into a room with us to hash out a resolution” to set up a repayment schedule. DCG has previously distanced itself from Genesis and its lending business.

“This mess is entirely of your own making,” Winklevoss said, alleging that DCG owes Genesis $1.675 billion. “This is money that Genesis owes to Earn users and other creditors,” Winklevoss said, alleging that DCG used those funds for other purposes, including “greedy share buybacks, illiquid venture investments and kamikaze Grayscale NAV trades.”

Grayscale Investments is also a unit of DCG, and its largest investment vehicle is the Grayscale Bitcoin Trust
GBTC,
+3.88%
.

In a tweeted response Monday, Silbert denied both that DCG borrowed $1.675 billion from Genesis and that it had missed an interest payment to Genesis, and said it is current on all loans outstanding. He added: “DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response.”

Winklevoss replied that Silbert was being “disingenuous.”

Ram Ahluwalia, CEO of digital-asset investment adviser Lumida Wealth Management, tweeted on Monday that “It’s a a game of chicken now,” and predicted that soon “DCG will be in a state of ‘indentured servitude’ to its debtholders — including its subsidiary Genesis.”

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