• Cameron Winklevoss has released an 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 alleges that Genesis Global Capital LLC, Genesis Trading’s $2.8 billion crypto lending arm, attempted to defraud others into believing that $1.2 billion of working capital had been injected into the company, when in fact they marked a 10-year promissory note down as a current asset.
• The letter concludes with a paragraph which reads, “There is no path forward as long as Barry Sibert remains CEO of DCG. He has proven himself unfit to run DCG and unwilling and unable to make the necessary changes to protect its users.”
Cameron Winklevoss, the Co-Founder of Gemini, has released an extensive letter that alleges that Digital Currency Group (DCG) and Genesis, its parent company, defrauded Gemini and more than 340,000 users of its Gemini Earn platform. Winklevoss’s letter alleges that Genesis Global Capital LLC, Genesis Trading’s $2.8 billion crypto lending arm, attempted to defraud others into believing that $1.2 billion of working capital had been injected into the company. This, despite the fact that the money was marked down as a current asset, which normally only refers to cash, cash equivalents, or other assets that can be exchanged into cash within one year. The letter claims that this 10-year promissory note falls outside the definition of a ‘current asset’ by “a country mile”.
In addition, the letter claims that Genesis was allegedly lending to Three Arrows Capital without regard to the risk of these loans, as the crypto hedge fund was apparently redirecting investment into Grayscale Investments’s GBTC, which limited the growing discount of the Trust. These risks were then passed on to the users of Gemini Earn. According to the letter, greed is ultimately what has driven these investment decisions and, apparently, the loss of Gemini Earn users’ funds.
The letter concludes with a paragraph which reads, “There is no path forward as long as Barry Sibert remains CEO of DCG. He has proven himself unfit to run DCG and unwilling and unable to make the necessary changes to protect its users.” In other words, Winklevoss believes that Barry Silbert and other key personnel at the companies have been complicit in this fraud and should be held accountable.
Overall, the letter paints a troubling picture of how some of the largest players in the cryptocurrency space have allegedly abused their power and betrayed the trust of their users. It remains to be seen whether Winklevoss’s claims will be proven and what action, if any, will be taken against those responsible.