The debacle between the Gemini exchange and crypto lender Genesis, and by extension, Digital Currency Group (DCG), has grown heated over the last couple of weeks. Now, with Gemini customers and creditors turning the heat up on the exchange to recover their funds, co-founder Cameron Winklevoss has taken the fight directly to DCG as he gives them an ultimatum to return owed funds.
One Week To Return $900 Million
Cameron, one-half of the infamous Winklevoss twins who founded the Gemini crypto exchange, took to Twitter to publish a scathing response to DCG CEO Barry Silbert. When Genesis Trading, which exists under the DCG umbrella, paused withdrawals, it had stranded over 340,000 Gemini Ear users. It is now more than a month since this happened and there has been no progress or word on when these customers would be able to withdraw their funds.
In the letter, Cameron told DCG that it had one week to return all of the money owed to his exchange. Apparently, the Gemini co-founder wants the company to return the complete $900 million so it can return it to customers. The founder told Silbert that he had until January 8 to return the funds.
For the past six weeks, we have done everything we can to engage you in a good faith and collaborative manner in order to reach a consensual resolution for you to pay back the $900 million that you owe, while helping you preserve your business. We appreciate that there are startup costs to any restructuring and at times things don’t go as fast as we would all like. However, it is now becoming clear that you have been engaging in bad faith stall tactics.
The letter also contained accusations towards the CEO over the way he had handled the issue so far. He alleged that Silbert had used the owed funds “to fuel greedy share buybacks, illiquid venture investments, and kamikaze Grayscale NAV trades.” Additionally, Cameron said that Silbert had done all of this for his own personal gain.
Will Gemini Get The Money?
At this point, there are only about four days left in the ultimatum that Winklevoss gave to Silbert. The latter has already taken to Twitter to deny claims that DCG owes over $1.6 billion to Genesis. But there is no talk of if it will honor the ultimatum or not.
There you go again. Stop trying to pretend that you and DCG are innocent bystanders and had nothing to do with creating this mess. It's completely disingenuous.
So how does DCG owe Genesis $1.675 billion if it didn't borrow the money? Oh right, that promissory note…
— Cameron Winklevoss (@cameron) January 2, 2023
Gemini is already facing backlash from its customers over the paused withdrawals. The plaintiffs in the case claim that the crypto exchange had offered unregistered securities with its “interest-bearing accounts” without providing investors the appropriate documentation needed to make an informed decision.
Other users have gone another route and filed a request for a class-action arbitration against Genesis and DCG claiming that the company had violated the Master Agreement since it knew it was insolvent six months ago but had covered it up and continued to accept deposits.