The Gemini CEO Requests That DCG Fire Barry Silbert

Key Points:

• In the most recent open letter to DCG’s leadership, Gemini CEO Cameron Winklevoss made even harsher accusations.
• Mr. Winklevoss also explained how Genesis came to be entangled in the current problem.

Tensions between Gemini and DCG/Genesis grew as “the call” of Gemini CEO to fire Barry Silbert.

Gemini CEO Cameron Winklevoss wrote an “ultimatum” to Digital Currency Group (DCG) CEO Barry Silbert last week, requesting that DCG and its subsidiary Genesis rectify the situation as quickly as possible. Currently, there are liquidity issues. Genesis was thought to be insolvent when it restricted withdrawals beginning in mid-November 2022, just a few days after FTX went bankrupt. Not only that, but Genesis’ parent company, Digital Currency Group (DCG), was also engulfed in a crisis due to questionable internal activities, which rendered the company insolvent.

After being accused of purposefully “buying time” to find an impossible way out, Genesis received an “ultimatum” from a $900 million creditor, Gemini exchange, demanding a solution by 8/08. In response, Genesis’ CEO announced in a letter to investors on January 4 that “additional time is required” to deal with the situation.

The Gemini CEO made more harsh statements in the latest open letter sent to DCG’s leadership after the January 8 deadline passed without receiving an official response from Barry Silbert, accusing Digital Currency Group, Genesis, and Barry Silbert of “scamming” Gemini’s 340,000 users by intentionally making false statements about their operations.

Based on what he understands, Gemini CEO also stated why Genesis became involved in the current crisis:

• Genesis lends $2.36 billion to Three Arrows Capital, a cryptocurrency investment vehicle that failed in July 2022.
• Genesis nevertheless lost $1.2 billion after liquidating Three Arrows Capital’s collateral. To maintain a solid business image, Barry Silbert has decided to do nothing with this loss. 
• However, in front of the media and the public, DCG claimed that it had pumped money into Genesis to cover losses. In reality, the two parties’ pledge is simply a loan arrangement with a 1% annual interest rate and a term of 2032. Essentially, DCG does not deposit any new coins into Genesis. 
• Not content with that, Genesis personnel also communicated to Gemini that the situation is under control. 
• Genesis is prepared to give so much money to Three Arrows Capital since Three Arrows Capital is one of the key units putting money into GBTC stock generated by Grayscale, another subsidiary of DCG operations, inflating the value of Grayscale’s assets and beautifying DCG.
• DCG/Genesis also purposefully falsified loan books in order to improve the company’s image on financial accounts.

Mr. Winklevoss, Gemini CEO concluded the letter by stating that Barry Silbert was no longer fit to lead the Digital Currency Group due to flagrant lies and fraud. To begin dealing with the dilemma, DCG’s board of directors must remove Mr. Silbert left the role of CEO and replace him with another CEO who is more eager to talk to creditors and fix the situation. Mr. Barry Silbert, Digital Currency Group, and Genesis have not yet responded to the update.

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