Market Analysis Report (03 Jan 2023)

Cameron Winklevoss, one of the co-founders of cryptocurrency trading platform Gemini, has accused the CEO of Digital Currency Group (DCG), Barry Silbert, of “bad faith stall tactics” and the intermingling of funds within his conglomerate that Winklevoss says left $900 million in customer assets in limbo.

Gemini halted redemptions on its lending product, Earn, which allowed users to generate as much as 8% in interest per year by lending out their tokens to Genesis Global Capital, one of the subsidiaries of Digital Currency Group.

The halt came in November after Genesis suspended redemptions and new loan originations at the lending unit because of its exposure to the collapsed cryptocurrency exchange FTX. Genesis has said it could take “weeks” to find a path forward, with bankruptcy being a possibility.

Winklevoss, facing pressure from customers whose funds have been locked, penned an open letter in which he says Silbert has been provided with multiple proposals to resolve the issue, and that the “mess is entirely of your own making.”

The letter cites some $1.675 billion owed to Genesis by the Digital Currency Group, which were used for other business purposes within the conglomerate. Silbert refuted several accusations in response, saying “DCG did not borrow $1.675 billion from Genesis” and “never missed an interest payment to Genesis and is current on all loans outstanding,” without providing more detail.

Winklevoss pushed Silbert to “publicly commit to working together to solve this problem,” which he said affects more than 340,000 Gemini Earn customers, by January 8. What will happen if no agreement is reached by then isn’t clear.

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• Source: https://www.cryptocompare.com/email-updates/daily/2023/jan/03/