The CEO of the venture capital company, Barry Silbert, has been called out in an open letter from Cameron Winklevoss, co-founder of the cryptocurrency exchange Gemini, to the board of the Digital Currency Board (DCG).
Cameron wrote an open letter to the DCG board on Tuesday, accusing the venture capital firm and its daughter company Genesis of defrauding more than 340,000 Gemini and Earn users. This accusation came amid rising tensions between the high-profile executives of DCG and Gemini in the wake of the FTX collapse.
The crypto boss said that Genesis Global Trading, the lending division of Genesis, which is also controlled by Digital Currency Group (DCG), and its CEO Barry Silbert misled users by fraudulently asserting that Genesis was solvent and financially sound.
Genesis declared that it is temporarily stopping redemptions and new loan originations in the aftermath of FTX’s demise. Genesis claims the “abnormal withdrawal demands” have surpassed its “current liquidity” in a tweet.
Midway through November, Gemini Trust Earn, a program that provided high-interest accounts thanks to a collaboration with Genesis Global, likewise stopped accepting redemptions as a result of the news. Genesis reportedly has over $900 million in client cash that belongs to Gemini.
It’s noteworthy that Cameron has already attacked Silbert in an open letter. He only last week sent Silbert an open letter in which he accused Silbert of employing “bad faith delay tactics” and demanded that he come up with a solution by January 8.
Silbert did not make any announcements, but Derar Islim, the interim CEO of Genesis, informed clients that additional time is needed to address the financial crisis affecting their lending operations.
By asserting that the majority of its firms are “functioning as usual” back in November of last year, Silbert attempted to convince investors that they are financially solid. On the strength of just $25 million in basic capital collected since its founding, he even claimed that they are on track to bring in $800 million in revenue this year.
While this was going on, Silbert had earlier claimed on Twitter that DCG had sent a proposal to settle the conflict to Genesis and Winklevoss’s advisors on December 29, but had not gotten a response.
