• Cameron Winklevoss has released an extensive letter alleging that Genesis and its parent company, Digital Currency Group (DCG), have defrauded Gemini and more than 340,000 Gemini Earn users.
• The letter alleges that after the crypto lending arm of Genesis Trading experienced losses of at least $1.2 billion in the wake of Three Arrows Capital’s collapse, the fund tried to pass these losses off as working capital by marking a 10-year promissory note as a current asset.
• The letter concludes with a call for Barry Silbert to be removed from his role as CEO of DCG due to his management of the situation.
Allegations of Fraud
Cameron Winklevoss has released an extensive letter alleging that Genesis and its parent company, Digital Currency Group (DCG), have defrauded Gemini and more than 340,000 Gemini Earn users.
Promissory Note Misrepresentation
The letter alleges that after the crypto lending arm of Genesis Trading experienced losses of at least $1.2 billion in the wake of Three Arrows Capital’s collapse, instead of taking action to restructure and protect users, the fund tried to pass these losses off as working capital by marking a 10-year promissory note as a current asset. This falls outside the definition of a ‘current asset’ by a country mile.
Lending Without Risk Appreciation
The letter also claims that Genesis was lending to Three Arrows Capital without regard to risk involved with these loans, as Three Arrows Capital was redirecting investments into Grayscale Investments’s GBTC which limited growing discount on trust funds; this risk was then passed on to users of Gemini Earn.
Greed Driven Investment Decisions?
The allegations point towards greed being what drove these investment decisions and consequentially brought about loss for many investors who entrust their funds into such platforms.
Call To Remove Barry Silbert As CEO
The letter concludes with a call for Barry Silbert to be removed from his role as CEO or DCG due to his management of the situation and inability or unwillingness to find resolution with creditors which is fair and reasonable.