Digital Currency Group (DCG) and its subsidiary Genesis Global Capital are facing accusations of fraud and deception by Cameron Winklevoss, co-founder of the cryptocurrency exchange Gemini. In an open letter published on January 10th, Winklevoss stated that he believes the CEO of DCG, Barry Silbert, is not suitable to lead the organization.
Allegations of Fraud and Deception
Winklevoss accused Silbert and Genesis of committing fraud and defrauding over 340,000 users who were a part of Gemini’s earned program. He further claimed that Genesis Global Capital owes Gemini 900 million dollars. The accusations stem from an alleged accounting irregularity by DCG and Silbert that would not have been revealed if it were not for the collapse of FTX in a matter of months. Winklevoss claims that the activities of recursive trades were carried out between Three Arrows Capital and Greyscale Bitcoin Trust, which he describes as effectively acting as a Ponzi scheme.
Open Letter to the Board
In his letter, Winklevoss calls for the ouster of Barry Silbert from DCG and for an investigation into the alleged fraudulent activities of the organization. He states that Silbert and Genesis orchestrated a deception starting in July 2022 in order to make it appear as if DCG had invested the funds into Genesis by including a 10-year promissory note as part of its assets. Furthermore, Winklevoss alleged that Genesis CEO Michael Morrow was involved in the deceptive conduct by issuing false and misleading statements on social media regarding DCG providing capital to Genesis.
If DCG is found of wrongdoing, the possible consequences could include fines and legal penalties, as well as damage to the reputation of the company and the broader crypto industry. There may also be implications for the individuals involved, such as Silbert and Morrow, who could face disciplinary action or even criminal charges.
Termination of Earn Program
Following the accusations, Gemini also notified its users that the Earn program is being terminated effective January 8th.
This is a developing story and it is unclear what the outcome will be, but it is important to note that this is a serious accusation against one of the major players in the crypto industry. It is important to keep an eye on the developments in this story and how it will impact the crypto industry as a whole.