Silbert: DCG doesn’t have to return the funds
- Cameron accused Silbert of misrepresenting statements to Gemini on how the company was capitalized
- DCG’s responsibility for Genesis restructuring and bankruptcy based on non-callable $1.1b promissory note
The feud between Gemini crypto exchange cofounder Cameron Winklevoss and Digital Currency Group (DCG) CEO Barry Silbert continues to escalate, with Winklevoss calling for Silbert’s removal from the company. David Hollerith reports on Yahoo Finance.
Winklevoss demanded Silbert step down
Cameron Winklevoss filed the second of two open letters. In the first one, which came last week, Winklevoss wrote:
There is no path forward as long as Barry Silbert remains CEO of DCG.
He demanded Silbert step down so DCG and Gemini can settle their ongoing dispute out of court.
Misrepresenting statements
Most recently, Cameron accused Silbert of misrepresenting statements made to Gemini in relation to how the company was capitalized after an earlier loss in the summer.
Silbert responded in a letter to investors. The key point of contention is about how culpable the company DCG is for Genesis’ current restructuring and potential bankruptcy. It boils down to this $1.1 billion promissory note, which is not callable now. That means DCG would not have to return those funds in the event of bankruptcy.
What does this mean for Genesis?
There still isn’t much debate there, but the war of words will go on according to Hollerith. Silbert has claimed that his company never took out a $1.675 billion loan from Genesis, adding that the company is current on all outstanding loans and never missed an interest payment. He suggested the next interest payment on the loan would be made in May.
The background
The Winklevoss twins turned to Genesis when the company introduced its Gemini Earn program, which offered a yield of up to 8% on crypto assets. Gemini paid the interest partially by loaning customer money to Genesis Global Capital, owned by DCG, which then loaned the funds to institutional clients.
After FTX’s collapse, Genesis suspended customer redemptions, leaving Gemini unable to pay back Earn clients.
