The ongoing saga between the Winklevoss brothers and Barry Silbert, the CEO of Digital Currency Group has taken a new twist. Today, Cameron Winklevoss, one of the co-founders of Gemini announced that he has filed a lawsuit against DCG and its CEO, Barry Silbert in a New York court. According to the lawsuit, Cameron Winklevoss indicted Barry Silbert for planning the DCG and Genesis fraud against Gemini and other creditors.
Further, the co-founder recalled how Barry Silbert allegedly compelled Gemini to continue its Earn program. However, Cameron Winklevoss disclosed that the DCG CEO urged the firm to continue the interest-yielding program despite his awareness of a huge hole in Genesis’s balance sheet. Per his revelation, Cameron Winklevoss said Barry Silbert referred to the deficit as a battle against timing issues.
More so, he went on to disclose how Barry Silbert allegedly lied to Gemini and other creditors on various occasions. The co-founder went on to describe how the collapse of 3AC in June 2022 left Genesis with a deficit worth $1.2 billion on its balance sheet. Likewise, in a bid to downplay the impending danger, Barry Silbert, according to Cameron Winklevoss, stated that DCG had intervened and covered the deficit. Lastly, the co-founder labeled the lawsuit as an important step in holding Barry Silbert and GCG accountable for their shortcomings.
Background into the lawsuit involving the Winklevoss brothers and Barry Silbert
Earlier, Gemini and Genesis collaborated for the former’s Earn program. The collaboration placed the custody of about $800 million worth of assets in the custody of Genesis. However, Genesis, as a renowned crypto lender, lent the money to its institutional customers including 3AC. However, the collapse of 3AC in 2022 birthed the beginning of a crisis for Genesis. As a bankrupt firm, 3AC could not return its loans, thereby leaving a hole in the balance sheet of Genesis.
Unfortunately, the crash of FTX further worsened the financial crisis of Genesis. This was because the crypto lender, which runs as a subsidiary of DCG, had $175 million exposure to the exchange. With this development, Genesis struggled to meet up with the withdrawal demands of Gemini investors. At the moment, the Winklevoss twin brothers are in trouble over the failure of Genesis to return the assets to the investors.
Recently, investors in the program filed a lawsuit against Silbert and the Winklevoss, accusing them of fraud. More so, the U.S. SEC also instituted a lawsuit against Gemini, Genesis and their executives. Ever since, Cameron Winklevoss and Silbert have been at loggerheads. At a time, Cameron wrote a letter to criticize Silbert’s approach to the issue.