Usuallythis kind of exchange takes place in private, but this time Cameron Winklevoss decided to play it differently. In a tweet published on Monday, the co-founder of the American platform Gemini called out Barry Silbert, the boss of Digital Currency Group (DCG), accusing him of having embezzled money from "hundreds of thousands of people" in the context of the FTX bankruptcy.
This tweet immediately unleashed a mountain of reactions and pushed Barry Silbert to come out of the woodwork who refuted these accusations. But what is really going on?
We're taking stock🔍
👉 Where did the case come from?
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It all started on November 16. On that day, the crypto lending company Genesis announced a freeze on withdrawals from its platform, some of whose funds went up in smoke with the fall of FTX (on November 11).
Genesis is no small player. This DCG subsidiary manages several billion dollars on behalf of companies, funds and platforms. Gemini was one of them and worked with Genesis to offer performance products to its clients; 8% per year.
In November, Barry Silbert committed to financially assisting his group's subsidiary so that withdrawals from Genesis would resume. But nothing has happened since. Gemini's 340,000 clients do not have access to their funds valued at almost $1 billion!
A complaint was filed in late December against Gemini, hence the tweet from Cameron Winklevoss.
👉 What's the problem?
In addition to the fact that DCG did not help its subsidiary Genesis, we have learned, in the meantime, that Genesis had lent money to DCG. This is precisely what Cameron Winklevoss points out. According to him, DCG would have diverted the money from Gemini's clients.
"It is a situation not unlike that of FTX with Alameda", points out the lawyer Victor Charpiat.
Cameron Winklevoss' goal is to put as much pressure as possible on Barry Silbert to recapitalize Genesis. He has given him until January 8 to do so, or he promises that the matter will be settled in court.
One of the cards that Gemini could play is the financial proximity between Genesis and DCG - exchange of money - to say that it is the same company and force DCG to pay. "It can be tried even if it is not easy to prove", Victor Charpiat underlines.
👉 Can DCG fall apart?
It is impossible to know at this stage. What is certain is that DCG does not seem to have sufficient cash, otherwise the situation would probably have been resolved by now.
Some explain that if DCG can't pay, another option might be to push the company to sell its positions in another of its subsidiaries, Grayscale. Founded in 2013, this company is simply the largest crypto asset manager on the planet (over $50 billion).
"It's their cash cow," confirms one fund manager. But it's still a secondary option, and it's unclear how deep Grayscale's pockets are.