Gemini Co-Founder, Cameron Winklevoss, has released extensive letter alleging that Genesis and its parent company, Digital Currency Group (DCG), defrauded Gemini and more than 340,000 Gemini Earn users. The letter also raised extensive fraud claims against Barry Silbert and other key personnel at the company.
The letter states that after Genesis Global Capital LLC, the $2.8 billion crypto lending arm of Genesis Trading, realized losses of at least $1.2 billion due to the collapse of cryptocurrency hedge fund Three Arrows Capital, instead of taking action to restructure and protect users, the fund it tried. to deceive others into believing that $1.2 billion in working capital had been injected into the company.
However, instead of doing this, the company allegedly marked the 10-year promissory note as a current asset, which typically “represents cash, cash equivalents, or other assets that can be converted into cash within one year,” according to the letter. However, Winklevoss wrote that, “Promissory notes with principal repayments over 10 years are not within the definition of ‘current assets’ by state miles.”
Winklevoss also explained how Genesis allegedly owed money to Three Arrows Capital regardless of the risk of this loan, as this crypto hedge fund apparently diverted its investment to Grayscale Investments’ GBTC, which limited many discounts from the Trust. This risk is then passed on to Gemini Earn users.
The letter states that greed ultimately led to the investment decision and apparently, the loss of user funds Gemini Get. The letter ends with a paragraph that reads, “There is no way forward as long as Barry Sibert remains the CEO of DCG. He has proven himself unfit to run DCG and is unwilling and unable to find a resolution with creditors that is fair and reasonable. As a result, Gemini, acting on behalf of 340,000 acquired users, requesting that the Board effectively remove Barry Silbert as CEO, and install a new CEO, who will right the wrongs that occurred under Barry’s watch.
While bitcoins held in custodian can be frozen and stolen, it should be noted that bitcoins properly stored in cold storage cannot, as stated in this letter. Gemini Earn users introduce third-party risks and unnecessary trust when they deposit funds on the platform, which then lends them trust funds. Bitcoiners need to explain to those who do not understand the difference between the platform and the true risk and storage of bitcoins.
In response to the letter, the DCG Twitter account released official statementattached below.