The debacle between Gemini exchange and crypto lender Genesis, and by extension, Digital Currency Group (DCG), has been heating up for the past few weeks. Now, with Gemini customers and creditors turning the heat up on the exchange to recover their funds, co-founder Cameron Winklevoss has directly fought to DCG because he gave an ultimatum to recover the loaned funds.
A week to generate $ 900 million
Cameron, one half of the infamous Winklevoss twins who founded crypto exchange Gemini, took to Twitter to issue a scathing response to DCG CEO Barry Silbert. When Genesis Trading, which is under the umbrella of DCG, paused the withdrawal, it has affected more than 340,000 Gemini Ear users. It has now been over a month since this happened and there has been no progress or word on when these customers will be able to withdraw their funds.
At letter, Cameron told DCG that he had one week to return all the money owed to the exchange. Apparently, Gemini’s founders want the company to return the full $900 million so they can return it to customers. The founders told Silbert they had until January 8 to return the funds.
Over the past six weeks, we have done everything we can to engage with you in good faith and collaboration to reach a consensual resolution so you can repay your $900 million debt, while helping you keep your business going. We appreciate that there are initial costs involved in any restructuring and that sometimes it is not as quick as we would like. However, it is now clear that you have engaged in poor stall tactics.
The letter also contains accusations against the CEO about the way he has handled the issue so far. He said Silbert had used the debt funds “to fuel greedy stock buybacks, illiquid venture investments, and Grayscale kamikaze NAV trades.” In addition, Cameron said that Silbert did all this for his personal gain.
Gemini will earn money?
At this point, there were only four days left on the ultimatum that Winklevoss gave Silbert. The latter has taken to Twitter to deny claims that DCG owes over $1.6 billion to Genesis. But there is no word on whether they will honor the ultimatum or not.
Here again. Stop trying to pretend that you and DCG are innocent people and had nothing to do with creating this mess. It is totally disingenuous.
So how does DCG owe Genesis $1.675 billion if it doesn’t borrow money? Oh right, that promissory note…
— Cameron Winklevoss (@cameron) January 2, 2023
Gemini has faced a backlash from customers over the pause withdrawal. The plaintiffs in the case claimed that crypto exchanges had offered unregistered securities with “interest bearing accounts” without providing investors with the appropriate documentation needed to make an informed decision.
Other users have gone the other route and filed a request for class-action arbitration against Genesis and DCG admitting that the company has violated the Master Agreement since knowing it was bankrupt six months ago but has covered it up and continues to receive deposits.