It will be recalled that the conflict began back in November 2022. That’s when Gemini’s Earn programme, which offered returns of up to 8 per cent per annum to its clients, was stopped from withdrawing funds. This came amid financial problems for the platform’s main partner Genesis Trading, which is a subsidiary of Digital Currency Group.

Cameron Winklevoss summarised in a recent open letter that things had deteriorated significantly at Genesis following the collapse of the Three Arrows Capital fund last year. The Winklevoss brothers, the founders of Gemini, claim DCG and its subsidiary owe them a combined total of more than $900 million. Meanwhile, the hole in the large company’s balance sheet exceeds the billion-dollar mark.

What will happen to Digital Currency Group (DCG)

In his public address Cameron Winklevoss described where it all started. Here’s his line, cited by The Block.

Genesis lent $2.36 billion in assets to 3AC, a Singapore hedge fund that went bankrupt in June 2022. After liquidating the pledge, Genesis indicated that it had incurred a loss of at least $1.2 billion. At this point Barry Silbert had two legal options: to restructure Genesis’ loan portfolio in or out of bankruptcy litigation, or to close the $1.2 billion hole in its balance sheet in another way. He has done neither.

Part from Cameron Winklevoss’ open letter

Winklevoss also claimed that Silbert, DCG and Genesis had orchestrated an “elaborate campaign of lies” dating back to July 2022. They were showing that DCG had allegedly injected funds into Genesis, while simply incorporating the ten-year promissory note into its assets. Genesis CEO Michael Moreau was also involved in the misleading scheme, Cameron believes. As an example, Winklevoss mentioned the following tweet from Moreau, published on July 6, in his address.

DCG has made certain commitments to Genesis related to the 3AC to ensure we have the capital to operate and scale our business in the long term.

DCG chief executive Barry Silbert

In addition, any accounting irregularities involving DCG and Silbert might have gone unnoticed if the FTX exchange had not declared bankruptcy last November. According to Cointelegraph sources, Three Arrows Capital and Grayscale Bitcoin Trust were carrying out “recursive transactions”, which Winklevoss described as “effectively exchange transactions”.

The resulting losses from them were not reflected in the accounts. Here is a relevant quote on the subject.

These balance sheet distortions were a clever ruse designed to give the impression that Genesis was solvent and able to meet its obligations to creditors without DCG’s financial backing.

All these deceptive manoeuvres, according to Cameron Winklevoss, are reason enough for Barry Silbert to step down as CEO of Digital Currency Group. He continues.

For all the above reasons, as long as Barry Silbert remains CEO of DCG, there is no way forward. He has proven himself unfit to run DCG, as well as unwilling and unable to find a fair and reasonable solution with creditors.

Here’s another quote from Cameron to that effect.

Genesis creditors, including Earn users, have suffered seriously and deserve a solution to recover their assets. I am confident that with DCG’s new leadership, we can work to reach a positive resolution outside of court that will be a win-win for everyone – including DCG’s shareholders.

Gemini founders Winklevoss brothers

The Digital Currency Group’s official Twitter account has already posted a response to Gemini’s co-founder’s open letter.

This is another desperate and unconstructive PR move from Cameron, needed to deflect blame from himself and Gemini. That said, they alone are responsible for the Gemini Earn programme and its marketing to their clients.

Note that such an attempt to shift responsibility to the Winklevoss brothers seems rather odd. Yes, they did advertise the Gemini Earn service to their own users, but it was Genesis that got themselves into quite a big debt. Why the company doesn't bring this up is unknown.

Response from the official DCG account

The official DCG account also announced that Silbert’s company will take any measures to legally protect its interests and have an ongoing dialogue with Genesis’ creditors.

By the way, Barry himself also took to Twitter to post a tweet of several tweets of his own merit. According to Silbert, the Digital Currency Group under his leadership has invested in more than two hundred companies that have significantly advanced the blockchain industry, created a public Bitcoin fund, launched a major news resource in the form of Coindesk along with the Bitcoin pool and so on. However, the losses mentioned by Cameron Winklevoss did not come up.

Apparently DCG and Genesis won’t want to address Gemini Earn’s problems now at least because of the Winklevoss brothers’ tough stance. The situation here is likely to result in a legal battle between Gemini and DCG, experts say. The Digital Currency Group already has enough problems: according to preliminary data, the regulators are interested in the company’s activities.


We believe that the possible collapse of DGC and Genesis will be a serious blow to the cryptocurrency industry, as it is through them that most of the industry's lending activity is conducted. However, their collapse would certainly not be a surprise in terms of the scale of FTX's collapse should it occur. After all, Gemini Earn has been known to have problems since November, and on top of that, Forbes has already rated Barry Silbert's fortune at zero. Hopefully, the potential impact of such an event will not end up in another long-term market crash.


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