Gemini co-founder slams DCG founder: "Fraudster, pay up or face formal lawsuit against DCG and personally"
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Gemini co-founder slams DCG founder: "Fraudster, pay up or face formal lawsuit against DCG and personally"
The game is over. I'm writing to inform you that your game has ended.
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On July 4, Cameron Winklevoss, co-founder of Gemini, released an open letter to DCG founder and CEO Barry Silbert, angrily accusing Silbert of continuously delaying compensation for $1.2 billion owed to 230,000 Earn users, maintaining a hostile attitude, prolonging proceedings, abusing mediation procedures to deceive creditors, and shamelessly claiming himself to be the real victim. Winklevoss stated he could no longer tolerate this behavior and issued a final ultimatum: if no agreement is reached, he will file lawsuits against DCG and Silbert personally on July 7.
Below is the full text of the open letter to Barry Silbert:
Barry, today marks day 229 since Genesis halted withdrawals, and day 174 since I last wrote you an open letter. For reminder, I am writing on behalf of 232,000 Earn users whose over $1.2 billion in assets remain trapped in Genesis—a company owned and controlled by Digital Currency Group (DCG), which in turn is owned and controlled by you.
As you well know, DCG as a corporate entity has been engaged in fraudulent conduct. As its leader, you cultivated and designed a culture built on lies and deception—many of which are now well-documented in public records.
It is staggering that when I detailed how you, your employees, and DCG conspired to make multiple false and misleading statements to creditors in order to conceal Genesis’ insolvency and financial condition—including fabricating balance sheets and other documents—you did not directly address or refute any of these claims.
Rather than explain where I might be mistaken or clarify any misunderstandings, you completely avoided the issue and responded in the most oblique way possible—by writing a self-absorbed, narcissistic letter to your shareholders.
On January 10, you wrote a letter to your shareholders (some of whom are also defrauded creditors) explaining how deeply your feelings were hurt.
The first complete thought in your nearly 4,000-word letter—“I’ve done quite a bit of reflection about the past year…”—was promising. Yet despite this hopeful start and all your professed introspection, you somehow forgot to address the multibillion-dollar elephant in the room: DCG owes creditors $3.3 billion, including $1.2 billion owed to Earn users.
You offered no apology for the stress, anxiety, and suffering your actions have inflicted upon them and their families. Nor did you apologize for the damage you caused our entire industry. However, you did inform everyone that “the past year has been the most difficult of my life.”
At first glance, your letter appears to be a masterclass in lack of self-awareness. After all, it’s odd to write a letter without addressing the very allegations that prompted it. Upon closer inspection, however, your letter reveals itself as yet another carefully crafted farce—an elaborate attempt to shift blame, buy time through feigned ignorance, and once again screw over creditors and Earn users. Allow me to explain.
After nearly eight months of communication with you, your lawyers, and your advisors, one thing has become crystal clear: You never intended to do the right thing—never intended to take responsibility for the mess created by you, your company, and your employees through reckless and fraudulent behavior.
Instead, your sole focus over these past eight months has been to buy time—to raise capital so you can stall creditors and Earn users yet again. Let me break down your own game plan for you.
Commit fraud. In June and July 2022, you, DCG, and Genesis deliberately lied to creditors, Earn users, and Gemini, making us all believe that DCG had absorbed Genesis’ $1.2 billion loss from two months earlier—in May—caused by the collapse of Three Arrows Capital (3AC).
In reality, DCG did not absorb those losses. Instead, it signed a fake long-term promissory note to make it appear as though it had—without sending Genesis a single dollar. This transaction was not made in good faith. You hoped nobody would notice—but unfortunately for you, someone named SBF came along and committed an even larger fraud, exposing yours.
Refuse to repay the promissory note. At this point, the right thing to do would have been either for you and DCG to actually absorb the $1.2 billion loss, or negotiate an agreement with creditors to restructure the promissory note’s terms and amounts in a legal, fair, and reasonable manner for all parties. You chose neither. Instead, you pretended to go through negotiations to placate gullible creditors while positioning DCG for years of litigation challenging the validity of the note in court.
Raise funds to repay a $630 million loan. Delay was critical because it gave you time to resolve the biggest threat hanging over your head: the $630 million loan that DCG owes to Genesis. Unlike the fabricated promissory note that doesn’t mature for ten years, this loan came due this past May. Failure to pay would trigger default and bankruptcy for DCG.
Since November, you’ve been working frantically—not to compensate creditors, but to raise capital so you could repay this loan and gain a decade-long window to freely litigate the phony promissory note. You haven't given up trying to force a better deal at everyone else's expense. To you, Earn users aren't people—they're numbers on a spreadsheet. Business as usual, brother.
Abuse the mediation process. By May 1, DCG still didn’t have the $630 million and was facing imminent collapse. Confronted with the prospect of a second default and second bankruptcy within six months, you sought more time through mediation—which creditors reluctantly granted as your final chance.
Mediation can be an effective mechanism—if properly structured, with clear timelines, strict deadlines, and real consequences.
Eight weeks later, after multiple extensions, no agreement has been reached. Why? Because mediation granted DCG indefinite, free deferment on its $630 million debt to Genesis. This cost-free stay severely harms creditors and Earn users in two crucial ways.
First, it denies creditors—including Earn users—the $630 million they were owed in May. Second, it completely undermines creditors’ and Earn users’ key negotiating leverage: bringing you to the table to settle the fraudulent promissory note and avoid protracted scorched-earth litigation.
Game over. I’m writing to notify you: your game is up.
Enough is enough—with over $100 million spent on related fees, all going to lawyers and consultants at the direct expense of creditors and Earn users.
Accordingly, we are enclosing our best and final proposal—one that is fair and reasonable for all parties and represents the minimum acceptable terms that supporting creditors will accept.
If you do not agree to this deal by 4:00 PM Eastern Time on July 6, we will take the following steps:
File suit against DCG and you personally: The lawsuit will be filed on July 7. Among other things, it will outline your personal liability in concealing Genesis’ insolvency and serve as a blueprint for similar class-action suits brought by the 232,000 Earn users against you and DCG.
File a turnover motion: We will urge the Genesis special committee to fulfill its fiduciary duties by filing a turnover motion on or before July 7, placing DCG in default and demanding immediate payment of the $630 million owed to creditors and Earn users—no further delays.
Pursue a non-consensual plan: We will work with the Genesis special committee to advance a non-consensual plan adhering to a strict timeline, mandating
immediate distribution to creditors and Earn users, with DCG’s contributions subject to litigation.
UCC litigation: We will urge the Unsecured Creditors Committee (UCC) to fulfill its fiduciary responsibilities by initiating litigation and discovery into various intercompany loans and transactions between DCG and Genesis entities.
Gemini looks forward to working with the Genesis special committee to end the mediation process and accelerate the bankruptcy proceedings, so relief can come to Earn users as quickly as possible.
Finally, in the past nine months, I’ve witnessed many reprehensible acts from you and your colleagues—but what disturbs me most was what you told me this past fall: You are the victim here.
It takes a special kind of person to owe hundreds of thousands of people $3.3 billion and still believe—or at least pretend to believe—that you’re the one who’s been wronged. Not even SBF had such delusions. In the end, he at least recognized how his actions harmed others and tried to make amends. I can confidently speak for all Earn users when I say: It’s time for you to do the right thing.
Cameron Winklevoss.
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