Cameron Winklevoss Writes Open Letter to Barry Silbert About Blocked Funds at Gemini

The situation surrounding the collapse of Sam Bankman-Fried’s cryptocurrency empire has become more complicated, with Cameron Winklevoss accusing Barry Silbert of using “bad faith stall tactics” and improperly mixing funds within his company, resulting in $900 million of customer assets being in limbo since FTX’s collapse, as Bloomberg has reported.

Gemini Trust Co., a company founded by the Winklevoss twins, has suspended redemptions on a lending product called Earn that promised investors up to 8% in interest on their cryptocurrency by lending them out to Genesis Global Capital, a company owned by Digital Currency Group, which is run by Barry Silbert.

Cameron Winklevoss criticized Silbert in a letter published on Twitter, claiming that crypto broker Genesis Global Capital and its parent company, Digital Currency Group (DCG), owe Gemini’s clients $900 million and have failed to reach a repayment agreement after six weeks of negotiations.

Silbert responded on Twitter, stating that DCG provided a proposal to Genesis and Gemini’s advisors on December 29, 2022 and has not received any response. Winklevoss also accused Silbert, CEO of DCG, of using $1.675 billion in funds borrowed from Genesis for the benefit of other DCG ventures instead of repaying creditors.

“You took this money – the money of schoolteachers – fo fuel greedy share buybacks, illiquid venture investments, and kamikaze Grayscale NAV trades that ballooned the fee-generating AUM of your Trust, all at the expense of creditors and all for your own personal gain.”

Gemini Trust Co., co-owned by the Winklevoss twins, suspended redemptions on its Earn product in mid-November, shortly after rival crypto exchange FTX filed for bankruptcy. Earn offered investors the possibility of earning up to 8% interest on their cryptocurrency by lending it out to Genesis. The pause on redemptions at Gemini came after Genesis announced that its derivatives business had around $175 million tied up on the now-insolvent FTX platform. Genesis stopped withdrawals and new loan originations when FTX filed for bankruptcy and creditors are now working with restructuring lawyers to avoid insolvency. Winklevoss’s letter comes as his company faces several challenges, including a lawsuit against Earn accusing it of fraud and securities law violations and angry customers who have been unable to access their accounts.