• Cameron Winklevoss sent an open letter to the Digital Currency Group (DCG) Board of Directors, accusing the current CEO Barry Silbert of allegedly conspiring and defrauding Gemini Earn users.
• The letter claims that Genesis, a crypto lender, was operating under a negative balance sheet for years due to the collapse of one of its major partners, Three Arrows Capital (3AC).
• Winklevoss claims that DCG and Genesis lent over $2 billion to 3AC before its collapse, leaving the crypto lender with over $1 billion in debt that was allegedly “absorbed” by DCG.
Cameron Winklevoss, co-founder of the crypto exchange Gemini, recently sent an open letter to the Digital Currency Group (DCG) Board of Directors. In the letter, Winklevoss accused the current DCG CEO, Barry Silbert, of allegedly conspiring and defrauding Gemini Earn users. Gemini Earn is a platform where users can obtain a yield by lending crypto assets to Genesis.
According to the letter, Genesis was operating under a negative balance sheet for years due to the collapse of one of its major partners, Three Arrows Capital (3AC). Winklevoss wrote that the parties conspired to make false statements and misrepresentations to Gemini Earn users in order to mislead lenders into believing that DCG had absorbed massive losses incurred by Genesis from the 3AC collapse.
Winklevoss also revealed that DCG and Genesis lent over $2 billion to 3AC before its collapse, leaving the crypto lender with over $1 billion in debt that was allegedly “absorbed” by DCG. Publicly, the company announced that it “assumed certain liabilities of Genesis,” however Winklevoss claims that Genesis’ parent company never took on debt from the crypto lender. Instead, they allegedly used a financial solution to “pretend to” have fixed the issues.
The open letter has raised some serious questions regarding the financial health and solvency of Genesis and DCG. It remains to be seen how the situation will unfold and if the allegations brought up by Winklevoss will have any legal repercussions.