C. Winklevoss Addresses $900B Owed to Gemini by Genesis – Calls Actions of Barry Silbert ‘Unconscionable’

In an open letter addressed to Barry Silbert, Cameron Winklevoss has publicly asked what has been on everyone's mind for almost two months now – Where is the nearly $1B owed to Gemini and the 340,000 clients of its Earn program?

The Backstory

The situation at hand is another instance of collateral damage being felt from the epic collapse of FTX.  In this particular instance, industry giant Genesis Trading was forced to halt consumer withdrawals at its lending unit.  Genesis was negatively affected by the FTX collapse, as it had hundreds of millions tied-up in the platform, putting a massive and unexpected strain on its operations in the short term.  Meanwhile, it is believed by Winklevoss that DCG, which is the mother company of various companies within the digital asset sector (CoinDesk, Genesis, Grayscale, etc.), owes its subsidiary Genesis roughly $1.675B – something disputed by Barry Silbert in a response to the aforementioned letter.

At the point in time in which withdrawals were halted, Genesis was in possession of nearly $1B in funds which it had lent out on behalf of Gemini and customers of its Earn Program.  In the time since, Winklevoss indicates that Gemini has done everything in its power to find a solution to the situation, but has only been met with “bad faith stall tactics”.

Accusations and Harsh Truths

In his letter, Winklevoss made it clear right off the bat that his letter was drafted in an attempt to speak for the scores of everyday people that have lost their live savings due to the irresponsible actions of industry elite.

Interestingly, Winklevoss goes beyond trying to simply appeal to Silbert for open dialogue.  He goes as far as making multiple accusations which include stating,

“…it's not lost on us that you've been working desperately to try and firewall DCG from the problems that you created at Genesis.  You should dispense with this fiction because we all know what you know – that DCG and Genesis are beyond commingled.”

Sadly, this is most likely true and highly ironic as the digital asset sector was supposed to be founded on the idea of fostering independence and trust-less protocols.  If the collapse of FTX and this situation involving DCG and Genesis have taught of anything though, it is that nearly every major player in the sector is reliant upon one another.  The big players have essentially emulated traditional finance while removing the safeguards which allow for it to work, giving us the worst of both worlds.

Moving Forward

Looking towards the coming weeks, Winklevoss indicates that the patience being afforded to DCG and Genesis by Gemini and its users is running out.  With that in mind, January 8th was given as a deadline for a public commitment to working with Gemini in finding a solution.

“The idea in your head that you can quietly hide in your ivory tower and that this will all just magically go away, or that this is someone else's problem, is pure fantasy.  To be clear, this mess is entirely of your own making.”

While Winklevoss did not indicate what steps it would take if DCG did not respond by January 8th, it is clear that Gemini will soon no longer be playing friendly with what was once an integral partner to its operations.