Gemini CEO Cameron Winklevoss sues misconduct by Barry Silbert, CEO of Digital Currency Group (owner of Genesis), regarding the CEX frozen funds controversy.
Gemini vs. Genesis
Cameron Winklevoss, the CEO of Gemini has written an open letter addressed to Barry Silbert, CEO of Digital Currency Group, which in turn owns Genesis Global Capital, in which he accuses him of “bad faith stalling tactics” regarding the dispute between their two companies that arose out of the FTX collapse.
Gemini, the centralised exchange owned by Winklevoss suspended the redemptions of the “Earn” services on the Cex, which originally offered users the chance to earn 8 percent interest on their cryptocurrencies. To do this, Gemini “turned over” the assets to Genesis Global Capital, which is now reported to owe Gemini users more than $900 million (according to what Winklevoss says).
The case of the locked funds
After the FTX bankruptcy, Genesis revealed that it had $175 million locked up in Sam Bankman-Fried’s exchange account. Therefore, Genesis suspended both repayments and new sources of loans to Gemini, then told customers that it would take weeks to find and solve this topic.
Winklevoss, faced with pressure from customers who cannot access their accounts, and reckoning with a lawsuit alleging fraud, then said he had provided Silbert with multiple proposals to resolve the problem, including the most recent on Dec. 25.
“Despite this, you continue to refuse to get into a room with us to hash out a resolution” Winklevoss in a letter. “Furthermore, every time we ask you for tangible engagement, you hide behind lawyers, bankers and processes. After six weeks, your behaviour is not only completely unacceptable, but also unconscionable.”
Winklevoss then asked Silbert to “publicly commit to working together to solve this problem by January 8, 2023.” Given that, again according to Winklevoss, this “mess” would be Silbert’s responsibility
Barry Silbert’s response
A few hours after the letter was published by Winklevoss, Barry Silbert, CEO of DCG, responded on Twitter publicly, stating that he made a proposal to Gemini that was never responded to.
He also claims in the same tweet that he never made the 1.675 billion loan from Genesis to DCG.
This situation is very important for the short-term future of the cryptocurrency market since Genesis represents one of the main lenders in the whole industry. A possible bankruptcy for Genesis could threaten Gemini’s solvency and increase the amount of FUD in the markets. At BusinessPlug, we are sure that this topic will evolve in the next few weeks, and we will do our best to summarise and to publish the upcoming news related to this topic.