Cameron Winklevoss, co-founder of the Gemini cryptocurrency exchange alongside brother Tyler, has put the heat on crypto firm Genesis Global Capital over hundreds of millions in withheld customer funds.
Gemini had previously engaged Genesis as a business partner for its Earn product, which allows users to earn yield by lending out their crypto assets.
But citing unprecedented market conditions, Genesis was forced to halt withdrawals after suffering from the collapse of FTX, formerly the world’s second-largest cryptocurrency exchange.
Winklevoss, who was played by Armie Hammer in 2010 Facebook (NASDAQ:META) thriller The Social Network, pulled no punches in an open letter to Barry Gilbert, chief executive of Genesis’ parent company Digital Currency Group (DGC), which is also the parent company of the struggling Grayscale Bitcoin Trust.
In the missive, Winklevoss accused Silbert of withholding nearly US$1.7bn in cash owed to Genesis. “You took this money – the money of schoolteachers – to fuel greedy share buybacks, illiquid venture investments, and kamikaze Grayscale NAV (net asset value) trades… all at the expense of creditors all for your own personal gain,” went the letter.
Earn Update: An Open Letter to @BarrySilbert pic.twitter.com/kouAviTho4“This mess is entirely of your own making,” it continued. “The idea in your head that your 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.— Cameron Winklevoss (@cameron) January 2, 2023
Winklevoss encouraged Silbert to commit to resolving US$900mln (£754mln) worth of outstanding customer funds by January 8.
Silbert said that DGC “did not borrow” US$1.7bn from Genesis, adding that DCG’s next loan maturity is due in May 2023.
Regardless, Genesis is feeling the heat from more than just Winklevoss. Three Earn users have filed a request for class-action arbitration against DCG and Genesis, alleging, among other things, that DCG failed to disclose its insolvency in the summer.
Genesis has been approached to make a comment.