Genesis Crypto Broker Negotiating in Bad Faith, Co-Founder Says

Cameron Winklevoss, who founded crypto exchange Gemini Trust with his twin brother, on Monday accused Digital Currency Group (DCG) CEO Barry Silbert of “bad faith stall tactics” and asked him to commit to resolving $900 million (roughly Rs. 7,450 crore) worth of disputed customer assets by January 8.

Gemini has a crypto lending product called Earn in partnership with DCG’s crypto firm Genesis. Genesis halted customer withdrawals in November, following the collapse of major crypto exchange FTX.

Winklevoss said Genesis owed more than $900 million to some 340,000 Earn investors, and that he had been trying to reach a “consensual resolution” with Silbert for the past six weeks.

“However, it is now becoming clear that you have been engaging in bad faith stall tactics,” Winklevoss wrote in an open letter to Silbert that was posted on Twitter.

“We are asking you to publicly commit to working together to solve this problem by January 8th, 2023,” he added. The letter did not say what would happen if an agreement was not reached by January 8.

Winklevoss wrote that DCG owed Genesis $1.675 billion (roughly Rs. 13,900 crore), which was money that Genesis in turn owed to Earn users and other creditors, adding “this mess is entirely of your own making.”

Silbert responded in a tweet that DCG did not borrow $1.675 billion from Genesis.

“DCG has never missed an interest payment to Genesis and is current on all loans outstanding,” Silbert said, adding that DCG delivered a proposal to Genesis and Winklevoss’ advisers on December 29 and did not receive a response.

Genesis wrote in a letter to clients on December 7 that it was working to preserve client assets and strengthen liquidity, adding that it would take “weeks rather than days” to form a plan.

© Thomson Reuters 2023