2023 Starts Off With A Bang: Winklevoss Slams Barry Silbert's Genesis, Accuses Of Commingling Funds
If anyone expected that the bursting of the crypto bubble and the resulting unprecedented tidal wave of failure and fraud would somehow be confined to 2022 we have some bad news.
As if the collapse of Sam Bankman-Fried’s crypto empire wasn't bad enough, its fallout just got much messier after digital-asset entrepreneur and Facebook billionaire, Cameron Winklevoss, accused fellow crypto businessman Barry Silbert of “bad faith stall tactics” and the commingling of funds within his conglomerate that Winklevoss says have left $900 million in customer assets needlessly in limbo since FTX’s meltdown.
First, some background: in early November, shortly after FTX imploded, Gemini Trust which was founded by the Winklevoss twins, paused redemptions on a lending product called Earn, which offered investors the potential to generate as much as 8% in interest on their digital coins. It did so by lending them out to Genesis Global Capital, one of the companies owned by Silbert’s Digital Currency Group. The Earn halt came after Genesis suspended both redemptions and new loan originations at its lending unit because of its exposure to FTX. Genesis has told clients that it could take “weeks” to find a path forward, and that bankruptcy may be one possibility.
Which brings us to today: this morning, facing pressure of his own from angry customers locked out of their Gemini accounts and a lawsuit alleging fraud, Cameron Winklevoss published an open letter saying he had provided Silbert with multiple proposals to resolve the issue, including as recently as Dec. 25. He told Silbert “this mess is entirely of your own making,” citing some $1.675 billion owed to Genesis by DCG, which it used for other business purposes within Silbert’s conglomerate. “This is money that Genesis owes to Earn users and other creditors.”
“It’s not lost on us that you’ve been working desperately to try and firewall DCG from the problems that you created at Genesis,” Winklevoss added, strongly hinting that the relationship between DCG and Genesis is similar to that between FTX and Alameda. And in case that wasn't clear, the next sentence strikes it home: “You should dispense with this fiction because we all know what you know — that DCG and Genesis are beyond commingled.”
https://www.zerohedge.com/markets/2023-starts-crypto-bang-winklevoss-slams-barry-silberts-genesis-accuses-commingling-funds