Gemini President Cameron Winklevoss said there’s no path forward as long as Barry Silbert remains CEO of Digital Currency Group.
The letter demanded that the DCG board out Silbert and install new management, while also accusing Silbert’s conglomerate of accounting fraud.
Tuesday’s letter was the latest in the spat between Gemini and DCG after Winklevoss publicly called out Silbert on January 2, 2023.
President and Co-Founder of Gemini Cameron Winklevoss escalated the ongoing spat with Digital Currency Group CEO and Founder Barry Silbert, accusing Silbert of accounting fraud and demanding that the company’s board install new management.
Winklevoss shared an open letter to the DCG board via Twitter on Tuesday, claiming that Genesis defrauded 340,000 Gemini Earn users and other creditors of roughly $1.67 billion by making “false statements and misrepresentations” regarding Genesis’s financial strength. Notably, Genesis is owned by Silbert’s DCG.
Bankrupt crypto broker Genesis reportedly cut a $1.2 billion hole in its balance sheet after lending $2.4 billion to crumbled crypto hedge fund Three Arrows Capital (3AC). Winklevoss goes on to accuse Silbert of doing nothing to address his company’s deteriorating books despite having “two legitimate options” to either restructure Genesis’s lending structure or fill the $1.2 billion hole left by 3AC’s crash.
At that point in time, the Genesis loan book was approximately $8 billion, which means that the $1.2 billion loss from 3AC would account for roughly 15% of the loan book’s assets. A restructuring then could have addressed this shortfall to achieve a full recovery of assets for all lenders – including Earn users – in a short amount of time and give them direct access to liquidity. But Barry chose not to do this. He also chose not to fill the $1.2 billion hole. Instead, he pretended to.
In addition to allegations of coordinated accounting fraud within Silbert’s mammoth company, Winklevoss also accused former Genesis CEO Michael Moro of making “false and misleading” statements. Moro claimed that DCG “assumed certain liabilities of Genesis related to 3AC” on July 6, 2022.
DCG agreed to a $1.1 billion promissory note with Genesis supposedly meant to stabilize the crypto broker. However, Winklevoss called the deal a “gimmick” that failed to address the company’s liquidity crunch.
Gemini President Sees No Path Forward With Silbert Leading DCG
Winklevoss opined that DCG requires new management for the benefit of all involved parties. In Tuesday’s open letter, Gemini’s President requested that the DCG board immediately remove Barry Silbert as CEO.
DCB’s board has five members per information available on Crunchbase. The board members include Jim Robinson, Lawrence Lenihan, Matt Haris, Glenn Hutchins, and Rocky Motwani.
The group called Cameron’s letter a “desperate and unconstructive publicity stunt from” in a Twitter reply on Tuesday.
The letter came as the second public move from Winklevoss in a bid to push DCG into action and seemingly expose Sibert’s unwillingness to “find a resolution with creditors that is both fair and reasonable. Gemini’s Co-Founder had previously called on Silbert in an open letter on January 2.