Gemini co-founder Cameron Winklevoss personally accused DCG and Barry Silbert of fraud and failure to repay $1.46 billion to creditors. Last week, Gemini warned that it would file a complaint if the partners did not agree to the proposed repayment plan.
Cameron Winklevoss claims that Gemini was ready to discontinue the Gemini Earn product back in October 2022. However, Silbert convinced the exchange not to close the project, knowing the insolvency of Genesis. As Winklevoss puts it, Barry Silbert lied despite serious holes in Genesis’ balance sheet. Genesis’ problems began after the collapse of the Three Arrows Capital (TAC) fund last June.
“When Three Arrows Capital collapsed in June, there was a $1.2 billion hole in Genesis’ balance sheet. Instead of admitting it, Genesis said as if everything was going right because DCG stepped in to cover the loss,” Cameron Winklevoss told me.
Businessman claims DCG suffered no losses and provided no real capital. DCG secretly issued a ten-year promissory note to Genesis at a very low interest rate of 1%, only a fraction of the reported $1.1 billion. Genesis was in serious financial trouble, so Silbert, DCG and Genesis jointly compiled the financial statements, deliberately hiding the truth from Gemini and creditors, Winklevoss resents.
According to the businessman, one report misclassified a fake promissory note with a 10-year maturity as a “negotiable asset.”. This was a false statement and a deliberate distortion of the situation, the Gemini executive assures.
“This is the height of fraud.. Barry Silbert and other DCG executives were directly involved in this lie. DCG’s then COO (and current president) lied when he told the lender that DCG covered Three Arrows Capital’s losses,” Winklevoss added.
In May, Gemini and cryptocurrency lender Genesis Global Capital asked a court to dismiss a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) seeking a permanent injunction against Gemini Earn.