Gemini Co-Founder Accuses DCG’s Silbert of ‘Bad Faith’ in $900M Funds Stalling Dispute
The co-founder of cryptocurrency exchange Gemini has accused Digital Currency Group CEO Barry Silbert of “bad faith stall tactics” amidst a business dispute precipitated by FTX’s multibillion-dollar implosion at the end of last year.
Cameron Winklevoss criticised Silbert in an open letter published on Twitter, claiming that Genesis Global Capital and its parent company, DCG, owe $900 million to Gemini’s clients. The letter asserts that Gemini has waited six weeks without word on a repayment agreement. DCG is also the parent company of CoinDesk.
Silbert responded by tweeting that DCG submitted a proposal to Genesis and Gemini’s advisors on December 29, 2022, but has received no response.
Winklevoss also accused DCG CEO Barry Silbert of using $1.675 billion that DCG, according to Winklevoss, “owes” Genesis for purposes that benefited other DCG ventures rather than paying back creditors.
Silbert tweeted in response that DCG “did not borrow $1,675 billion from Genesis.” Additionally, he stated that DCG has never missed an interest payment to Genesis and is currently on all outstanding loans.
DCG does have a $1.1 billion promissory note related to liabilities from Genesis related to the Three Arrows Capital default, and in November Silbert informed shareholders that DCG owed Genesis Global approximately $575 million, which is due in May.
Gemini Trust Co., which is co-owned by Winklevoss and his twin brother Tyler, paused redemptions on an interest-earning product called Earn in the middle of November, a week after a competing cryptocurrency exchange filed for bankruptcy. By lending their digital tokens to Genesis, the product provided investors with the opportunity to earn up to 8% interest on their crypto.
Gemini’s redemption pause followed Genesis’ announcement that its derivatives business had approximately $175 million locked on the platform of the insolvent FTX. Upon FTX’s filing for bankruptcy, Genesis ceased withdrawals and halted new loan originations. Since then, creditors of Genesis have been collaborating with restructuring attorneys to avoid bankruptcy.
Winklevoss’s letter arrives as his company faces significant financial headwinds, including a lawsuit alleging fraud and securities law violations against the Earn product and a mob of angry Earn customers unable to access their accounts.
World Economic Forum Says Crypto and Blockchain Technologies Will Continue to be an “Integral” Part of Modern Economy
The World Economic Forum (WEF) believes that the technology that underpins cryptocurrencies and digital assets will remain “integral” to the modern economy.
In a blog post published on Monday, the international organisation discussed the future of the cryptocurrency industry. The WEF highlighted in particular the widespread applications of cryptography and blockchain technologies, noting that their use in the financial services industry is already noteworthy.
According to the report, JPMorgan has earned a favourable reputation in the crypto industry, but the bank is no longer alone in Web3 and crypto adoption.
The World Economic Forum compared the implementation of cryptography and blockchain technologies to the adoption of cybersecurity and digital transformation. The organisation stated, “The adoption of crypto technology is equally inevitable, even if the term feels like a bad word.”
The organisation acknowledged that the crypto industry, like any other financial sector, is not risk-free. However, it was noted that the transparency of crypto leaves bad actors with few hiding places.
According to reports, federal law enforcement officials in New York City arrested a couple earlier this year after gaining access to files in a Lichtenstein-controlled online account containing the private keys to BTC 94,000 (USD 4.1bn) stolen from Bitfinex. The breach occurred in 2016.
The WEF also referred to 2022 as “the worst year for crypto” From its all-time high of approximately $3 trillion, the market capitalization of cryptocurrencies has fallen to around $800 billion, a loss of over $2 trillion.
Recent incidents, particularly the collapse of FTX, once the third-largest cryptocurrency exchange in the world, have eroded user confidence in the industry and attracted the attention of global regulators, according to the organisation.