Gemini Co-Founder Accuses Genesis, DCG of Fraud, Demands Silbert’s Removal

• Cameron Winklevoss has leveled claims of fraud against Genesis and Digital Currency Group (DCG), alleging they defrauded Gemini and over 340,000 Gemini Earn users.
• Winklevoss claims that instead of taking action to restructure and protect users, Genesis marked a 10-year promissory note down as a current asset.
• The letter concludes with a demand that Barry Silbert be removed as CEO of DCG, as he has proven himself unfit and unwilling to properly run the company.

Cameron Winklevoss, the Co-Founder of Gemini, has released an extensive letter that alleges that Genesis and its parent company, Digital Currency Group (DCG), have committed fraud against Gemini and more than 340,000 Gemini Earn users. The letter accuses the companies of trying to deceive users into believing that $1.2 billion of working capital had been injected into the company when in reality, they had only marked a 10-year promissory note down as a current asset.

The letter explains that this alleged fraud began when Genesis Global Capital LLC, Genesis Trading’s $2.8 billion crypto lending arm, experienced losses of at least $1.2 billion due to a collapse of cryptocurrency hedge fund Three Arrows Capital. Instead of taking action to restructure and protect users, the firm allegedly marked a 10-year promissory note down as a current asset, which, according to the letter, “refers to cash, cash equivalents, or other assets that can be exchanged into cash within one year.” However, Winklevoss makes the point that a promissory note with a principal repayment due in 10 years does not meet the definition of a “current asset.”

Furthermore, the letter claims that Genesis was lending to Three Arrows Capital without taking into account 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. This risk was then passed on to the users of Gemini Earn. Additionally, the letter alleges that greed is what drove these investment decisions, which in turn led to the loss of Gemini Earn users’ funds.

The letter concludes with a demand that Barry Silbert be removed as CEO of DCG, as he has proven himself unfit and unwilling to properly run the company. It argues that there is no path forward as long as Silbert remains in his position.