DCG Responds As Gemini Accuses Company of Fraud

The Breakdown


Let's get into the meat of today. And that is, of course, the DCG drama continuing. I mentioned on yesterday's show as I was finishing up recording that Cameron winklevoss had just dropped another open letter. His second in two weeks. That letter ended up eliciting the longest response we've seen for months from DCG and its CEO Barry silbert. At this point, I don't think many of you need too much background, but the ultra TLDR of the situation is that genesis is a subsidiary of the digital currency group DCG, who also own coin desk, by the way. And genesis has both a lending business and a trading business. The lending business in particular had a rough 2022. They were the biggest creditor of three arrows capital after it collapsed, which led to DCG taking over that claim and the genesis CEO resigning. Genesis also had a $175 million or so stuck on FTX, and in the wake of the FTX collapse, genesis lending halted withdrawals. Among other things, that has trapped around $900 million that was part of Gemini's earn program, which is their consumer yield program. As time has gone on, Gemini's customers have been getting angrier and angrier and so too the public pressure from Gemini on genesis and DCG is also ratcheted up. Last week, that took the form of an open letter asking for Barry silbert and DCG to come to the table by January 8th, which was Sunday. That's the letter in which Cameron winklevoss accused silbert of bad faith stall tactics his words. In the wake of that, there was a bit of back and forth on Twitter, but nothing really more than that. Then of course, on Friday, Bloomberg reported that DCG and genesis were being investigated by the Department of Justice, which took the situation up a couple more notches. Well, yesterday on Tuesday, Cameron winklevoss dropped a second open letter and this one was even more accusatory than the first. This one was directed not to bury silbert, but to the entire digital currency group board. The big theme of that letter was that this was no longer just a public disagreement between business partners, but an accusation of fraud. The letter kicks off, I am writing to let you know that Gemini and more than 340,000 earn users have been defrauded by genesis global capital. Together with its parent company digital currency group, its founder and CEO Barry silbert, and other key personnel.

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