Cameron Winklevoss calls for Barry Silbert’s resignation

Gemini co-founder Cameron Winklevoss has called on Digital Currency Group (DCG) CEO Barry Silbert to resign over $900 million in outstanding Earn debt in an open letter.

“I am writing to inform you that Gemini and over 340,000 Earn users have been defrauded by Genesis Global Capital LLC and its parent company Digital Currency Group,” the document reads.

According to Winklevoss, Silbert-led structures misled the public about their financial condition and solvency.

In a previous letter published a week ago, the Gemini co-founder suspected the head of DCG of using “tactics of unfair delay in the process” of repaying users’ debts. He also urged Silbert to commit to fixing the problem by January 8th.

Earn’s landing product offered investors an income of up to 8% per annum on deposits made. In mid-November, Gemini suspended payments for the program. This happened against the backdrop of financial problems of the main partner, the Genesis Trading OTC platform.

According to media reports, the firm and its parent company DCG owe $900 million to the exchange’s clients.

In the latest letter, the Gemini co-founder emphasized that Genesis was prepared to “recklessly lend funds” to bankrupt hedge fund Three Arrows Capital (3AC). The latter allegedly Goth used the money for “Kamikaze net worth operations by Grayscale”.

Winklevoss describes this process as “a recursive deal that inflated AUM of the Grayscale Bitcoin Trust (GBTC), and, as a result, the commission income of its sponsor, Grayscale Investments, which is a division of DCG.

“3AC was a mule that moved assets between the parties. As a result, Genesis took a huge risk,” added Winklevoss.

He stressed that Genesis lost $1.2 billion from dealing with Three Arrows Capital.

In December, investors filed a class-action lawsuit against Gemini and its founders Tyler and Cameron Winklevoss for selling unregistered securities in the form of Earn interest-bearing accounts.

According to Bloomberg, in January SEC and the US Department of Justice began to study the nature of the interaction between the Digital Currency Group and its subsidiary Genesis Trading OTC platform.

This month, DCG announced the closure of asset management subsidiary HQ Digital.

Despite the accumulated problems at Barry Silbert’s company, on January 9, the GBTC rate jumped by 12%. Securities discount relative to NAV decreased from a record 49% to 44%.

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