Gemini’s CEO Accuses Genesis Brokerage CEO Barry Silbert Over Frozen User Funds

Cameron Winklevoss, the co-founder of Gemini Trust Co., recently slammed the CEO of Genesis Brokerage, Barry Silbert. He accused Silbert of mismanaging users’ funds which led to the stalling of withdrawals of about $900 million on the Genesis brokerage platform.

Winklevoss Accuses Genesis CEO Over Suspended Users’ Funds

The destructive effect of FTX’s collapse continues to roll over the crypto community, causing a businessman to accuse his colleague. According to reports, Winklevoss alleged that Silbert of Genesis brokerage mismanaged users’ funds for personal motives.

Consequently, the stalling tactics deployed by Silbert have led to the suspension of about $900 million in users’ funds, an event that could have been avoided. Gemini Trust Co., created by Winklevoss and his twin brother, recently stopped his lending project, Gemini Earn, which incentivizes users with 8% interest on their crypto holdings.

Gemini runs the Earn project by lending out users’ crypto holdings to Genesis Global Capital, founded by Barry Silbert. However, due to excessive exposure to the collapsed FTX network, Genesis had to halt loan redemption, the origination of new loans, and other lending services in November 2022.

In addition, Genesis told its customers that the issue might take weeks to resolve and they should not rule out the possibility of the firm filing for bankruptcy. Consequently, the trouble in Genesis transcended to Gemini Trust, forcing it to halt its Earn program.

The adverse chain event led to severe agitations from Gemini customers whose accounts were locked up. In addition, the firm recently received a lawsuit accusing it of fraud.

Winklevoss’s Defense Statement

In self-defence, Winklevoss wrote a public letter stating that he had, on many occasions, reached out to Silbert to solve the present predicament. In the letter, he alleged that the issue was 100% caused by Genesis.

Winklevoss further stated that Genesis loaned DCG about $1.675 billion to fund their illiquid businesses, share buybacks, and other personal trades. He added that the executives of Genesis and DCG funded their expenditures at the expense of users’ funds, including the funds of about 340,00 Earn users.

Winklevoss also stated that Genesis must solve the issue as it has affected about 340,000 Earn customers before January 8, 2023. However, Silbert reportedly responded by tweeting that DCG only owes Genesis about $575 million, not $1.6 billion, as claimed by Gemini CEO.

In addition, he said the parent firm of Genesis (DCG) promised to inject about $1.1 billion into the firm to cater for liabilities shortly after the Three Arrows Capital collapse last year. He added that the fund would be accessible by June 2023.

Furthermore, Silbert said DCG has proposed to solve the current problem, but neither Genesis nor Gemini’s representatives are yet to give a response. In its comment, DCG tweeted that its operations are entirely separate from Genesis’, and it is not affected by the crisis happening at Genesis Capital.

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