1672706085 Crypto magnates Cameron Winklevoss and Barry Silbert trade barbs

Crypto magnates Cameron Winklevoss and Barry Silbert trade barbs

Tensions between crypto magnates Cameron Winklevoss and Barry Silbert erupted in an open dispute on Twitter earlier in the new year, with Mr Winklevoss accusing Mr Silbert of “malicious stall tactics” that hurt common customers.

Monday’s back and forth deals another blow to a sector struggling for credibility, especially since the collapse of FTX and its associated trading firm Alameda Research. The collapse of the two companies led to outflows from other crypto exchanges and the near-wiping of coins tied to FTX and Alameda, domino effects in a tightly-knit industry.

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Crypto investors are closely watching negotiations between the Gemini exchange, founded by Mr. Winklevoss and his brother, and lender Genesis Global Capital. In the past year there have been bankruptcies of several crypto companies that have been closed with FTX. Traders are heading into the new year with caution ahead of further turbulence.

Genesis, the lending unit of Mr. Silbert’s crypto conglomerate Digital Currency Group, halted lending and repayments on Nov. 16 after failing to honor customer withdrawal requests. Genesis cited FTX’s demise. The Wall Street Journal previously reported that Genesis had outstanding loans to FTX’s sister trading firm.

Genesis is a lending partner of Gemini’s Earn program, which allows retail users to lend their cryptocurrencies at annual interest rates of up to 8%. Gemini suspended customer payouts from the Earn program the same day Genesis made its announcement. According to Mr. Winklevoss, Gemini’s 340,000 Earn users have contributed more than $900 million to the Earn program.

Crypto exchange Gemini has joined forces with other Genesis creditors to find a way for the crypto lender to return owed assets.

Crypto magnates Cameron Winklevoss and Barry Silbert trade barbs

The Gemini exchange was founded by Cameron Winklevoss and his brother.

Photo: Joe Raedle/Getty Images

In an open letter to Mr. Silbert Monday, Mr. Winklevoss said Genesis believers had repeatedly attempted to meet with Mr. Silbert and had sent him several proposals, including one on Christmas Day.

“Yet you continue to refuse to come into the room with us to draft a resolution,” Mr. Winklevoss wrote. “Every time we ask you for specific involvement, you hide behind lawyers, investment bankers and lawsuits. After six weeks your behavior is not only totally unacceptable, it is unconscionable.”

Mr Silbert responded on Twitter, saying his company submitted a proposal on December 29 “and received no response”.

Mr. Winklevoss also said that Mr. Silbert’s parent company, DCG, owes its subsidiary Genesis $1.675 billion. Mr. Silbert responded on Twitter that DCG had not borrowed $1.675 billion from Genesis and was up to date on any outstanding loans.

Mr. Silbert said in a letter to investors in November that DCG owes Genesis approximately $575 million, which matures in May 2023, in addition to a $1.1 billion promissory note to Genesis that matured in June due in 2032.

Last year, DCG assumed debt from Genesis after crypto hedge fund Three Arrows Capital defaulted on the $2.4 billion in loans Genesis had raised, prompting the issuance of the $1.1 billion promissory note -Dollar led as DCG seeks to recover assets from Three Arrows liquidation proceedings.

Spokespersons for Gemini and DCG declined to comment beyond Mr. Winklevoss and Mr. Silbert’s tweets.

This isn’t the first row between crypto titans to spill over onto Twitter in recent weeks. FTX’s Sam Bankman-Fried and Binance’s Changpeng Zhao berated each other just before FTX imploded in November.

Mr Bankman-Fried is likely to appear in court on Tuesday to plead his case against US prosecutors’ fraud allegations. He is likely to plead not guilty, the Journal reported.

Write to Vicky Ge Huang at vicky[email protected] and to Caitlin Ostroff at [email protected]

Corrections & Enhancements
Digital Currency Group assumed debt from Genesis last year. A previous version of this article incorrectly said that this happened earlier this year. (Corrected on January 2nd)

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Appeared in the print edition on January 3, 2023 as “Crypto Magnates Trade Barbs Online Over Lender’s Freeze”.