In a recent open letter, the founder of Gemini accused the Genesis trading platform of losing $1.2 billion in the 3AC accident and concealing the loss from both Gemini and Digital Currency Group (DCG) users.
The letter also called for the removal of Barry Silbert from his position as head of Genesis and for a new leadership team to be put in place.
Cameron Winklevoss, CEO of Gemini, alleged that Silbert’s trading platform had loaned $2.36 billion in assets to a hedge fund that failed, resulting in a loss of at least $1.2 billion. He accused Silbert of not taking proper action to address the loss, either through restructuring or filling the deficit.
When the loss from 3AC occurred, the total amount of loans held by Genesis was approximately $8 billion. Therefore, the $1.2 billion loss from 3AC represented approximately 15% of the total assets in the loan book.
According to the letter:
Beginning in early July 2022, Barry, DCG, and Genesis embarked on a carefully crafted campaign of lies to make Gemini, Earn users, and other lenders believe that DCG had injected $1.2 billion of actual support into Genesis.
Genesis & Its Open Lies
Winklevoss’s open letter pointed out a number of lies, which some are, on July 6th, Michael Moro, who was the CEO of Genesis at the time, tweeted that DCG had assumed certain liabilities of the trading platform related to 3AC to ensure that they had the capital to operate and scale the business for the long term.
However, in the open letter, Winklevoss alleges that this statement was “false and misleading” and that DCG had not provided any funding to Genesis to ensure that it could operate.
In internal communications, several individuals involved lied and covered up the truth about the extent of the losses from 3AC in both of Silbert’s companies.
For example, the Head of Trading and Lending of the trading platform sent an email with a document titled “Three Arrows Post-Mortem” to multiple Gemini employees.
The document falsely stated that the losses were absorbed by DCG, leaving the platform with adequate capitalization to continue business as usual. But it’s said by Winklevoss that, in reality, DCG had not absorbed the 3AC losses on its balance sheet.
In the end, the founder of Gemini demanded:
the Board remove Barry Silbert as CEO, effective immediately, and install a new CEO, who will right the wrongs that occurred under Barry’s watch. Genesis lenders, including Earn users, have been seriously harmed and deserve a resolution for the recovery of their assets
Related Reading | Seeking Plea Bargains: Former FTX Engineering Chief Talks to U.S. Federal Prosecutors