Since the bankruptcy of the FTX group last November, companies in the sector have found themselves embroiled in financial difficulties. Recently, the president of the cryptocurrency exchange Gemini published an open letter on Twitter to the Digital Currency Group to recover funds from its customers whose value reaches $900 million.
Gemini President Takes Action
In an open letter posted on Twitter, Gemini company chairman Cameron Winklevoss denounces the behavior of the CEO of the Digital Currency Group (DCG), Barry Silbert: the latter would flee his responsibilities by refusing to reimburse 900 million dollars held by Genesis, a subsidiary of the DCG.
As a reminder, since the bankruptcy of the FTX group in November 2022, Genesis has interrupted withdrawals from its customers: The company lost $175m in the collapse of the former Bahamian-born juggernaut. At the same time, the firm held the assets of customers of Gemini Earn, a Gemini service offering annual returns to users.
Since Genesis was Gemini’s main loan partner, the closure of its withdrawals caused the suspension of Gemini Earn, as well as the freezing of its clients’ assets. As a result, the president of the Gemini company is seeking to recover its users’ funds from the parent company of Genesis:
” We are aware that any restructuring involves start-up costs and that sometimes things do not go as quickly as we would all like. […] However, it is now becoming clear that you engaged in bad faith blocking tactics. »
Note that the Digital Currency Group is a very important group in the cryptocurrency ecosystem, notably owning the platform GenesisThe media CoinDeskas well as the asset management company Grayscale Investments.
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The response of the Digital Currency Group
The problems don’t end there for Barry Silbert. Cameron Winklevoss claims the DCG CEO must repay nearly $1.7 billion to Genesis. In response to this open letter, Barry Silbert assures that his company is in good standing with the debts it has incurred :
DCG did not borrow $1.675 billion from Genesis
DCG has never missed an outstanding interest payment to Genesis and is current on all loans; next loan maturity is May 2023
DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response
— Barry Silbert (@BarrySilbert) January 2, 2023
“The DCG did not borrow $1.675 billion from Genesis. The company has never missed an interest payment to Genesis and is current on all outstanding loans; the next loan due date is May 2023. Our group provided Genesis and your advisors with a proposal on December 29 and received no response. »
Contrary to what Cameron Winklevoss said, only $575 million in debt was incurred by the DCG from Genesis. The remaining $1.1 billion in debt is related to the bankruptcy of Three Arrows Capital. In addition, still according to Barry Silbert, the DCG would have offered a deal to Genesis on December 29, 2022, with no response from the company.
To sum up the situation, if the DCG does not provide liquidity to its subsidiary Genesis, the latter will never be able to reimburse Gemini Earn customers. In order to resolve their differences, the president of Gemini concluded his open letter with a proposal for a meeting between the two parties, scheduled for January 08, 2023. Pending the outcome of this case, the funds deposited by customers in the Gemini Earn service unfortunately remain inaccessible.
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Source : Twitter
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Always enthusiastic about new technologies, I gradually moved closer to Web3-related activities during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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