Gemini’s Cameron Winklevoss accuses crypto chief Barry Silbert of ‘bad faith’ for freezing frozen funds

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

Last week, investors sued Geminias well as Winklevoss and his twin brother, Tyler, accusing them of fraud and selling paid accounts without registering them as securities.

In his Monday letter, Cameron Winklevoss claimed that Silbert had repeatedly refused over the past six weeks “to come into a room with us to work out a resolution” to establish a repayment schedule. DCG has already distanced itself of Genesis and its lending activities.

“This mess is completely your fault,” Winklevoss said, alleging DCG owes Genesis $1.675 billion. “It’s money that Genesis owes Earn users and other creditors,” Winklevoss said, alleging that DCG used those funds for other purposes, including “greedy stock buybacks, illiquid venture capital investments and kamikaze Grayscale NAV transactions”.

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

In a tweeted reply On Monday, Silbert denied both that DCG had borrowed $1.675 billion from Genesis and that he had missed an interest payment to Genesis, and said he was current on all outstanding loans. He added: “DCG delivered a proposal to Genesis and your advisers on December 29 and received no response.”

Winklevos responded that Silbert was “dishonest”.

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