Gemini’s co-founder Tyler Winklevoss has posted a note today calling for the ouster of Digital Currency Group (DCG) CEO Barry Silbert because a DCG division’s November decision to halt withdrawals leaves owners of Gemini’s crypto yield product in limbo. Winklevoss asked the DCG board to remove Silbert, citing DCG’s inability to find a fair resolution with creditors of DCG’s Genesis unit.
DCG didn’t immediately respond to the request for comment, but the company tweeted on Tuesday that “this is another desperate and unconstructive publicity stunt from cameron to deflect blame from himself and Gemini, who are solely responsible for operating Gemini Earn and marketing the program to its customers.”
The conglomerate’s troubles stem from its subsidiary Genesis, a crypto broker, which allowed customers to lend out their coins for high yields. After the collapse of FTX in November, Genesis suspended customer withdrawals, including some funds stemming from Gemini, and hired Moelis investment bankers to help explore its options. Last week, Silbert said DCG had not received a response to its own proposals to Winklevoss and other creditors, which include Dutch exchange Bitvavo and crypto savings firm Donut.
In a new public letter on this matter published on Tuesday, Cameron called on the group’s board to sack Silbert immediately. The Winklevoss twins do not own a stake in DCG, limiting their capacity to force Silbert’s hand. DCG’s web of intra company loans, and investments, previously revealed by the Financial Times, has further complicated the picture for creditors.
Who is Cameron & Tyler Winklevoss?
Cameron Howard Winklevoss (born August 21, 1981) is an American cryptocurrency investor and Olympic rower, who (with his brother) founded Winklevoss Capital Management and Gemini cryptocurrency exchange. He competed in the men’s pair rowing event at the 2008 Summer Olympics with his identical twin brother and rowing partner, Tyler Winklevoss.
Winklevoss and his brother are known for co-founding HarvardConnection (later renamed ConnectU) along with Harvard classmate Divya Narendra. In 2004, the Winklevoss brothers sued Facebook founder Mark Zuckerberg, claiming he stole their ConnectU idea to create the popular social networking site Facebook. In addition to ConnectU, Winklevoss also co-founded the social media website Guest of a Guest with Rachelle Hruska. Forbes estimates that each twin has a cryptocurrency holding of $1.4 billion.
What Tyler Winklevoss alleged?
In the letter, Winklevoss alleged that DCG and Genesis “pretended to” plug the $1.2 billion hole left in Genesis’ lending business by 3AC’s collapse in July.
Winklevoss went on to allege that the companies committed “accounting fraud” by misrepresenting the bailout on Genesis’ balance sheet under “current assets” (which commonly refers to cash and cash equivalents). Instead, DCG’s payment to Genesis was in the form of a 10-year promissory note at 1% interest, which was worth only $300 million at face value, according to Winklevoss.
