Gemini co-founder publishes open letter condemning DCG founder: “Scammer, return the money, or face legal action from both DCG and me.”

Gemini co-founder writes open letter accusing DCG founder of being a scammer and demanding the return of money, threatening legal action from both DCG and the co-founder.

Author: 0xmin Translator: DeepTechFlow

On July 4th, Cameron Winklevoss, the co-founder of Gemini, published an open letter to Barry Silbert, the founder and CEO of DCG, accusing him of repeatedly delaying the repayment of $1.2 billion owed to 230,000 Earn users. Cameron also criticized Silbert for his bad attitude, using delay tactics and abusing settlement procedures to deceive creditors, and shamelessly claiming to be the victim. Winklevoss stated that he had had enough and issued a final warning to Silbert that if he did not agree to repay the debts, he would sue DCG and Silbert personally on July 7th.

The following is the full text of the open letter to Barry Silbert:

Barry, today marks the 229th day since Genesis stopped withdrawals, and 174 days since I last wrote to you. As a reminder, I am writing to you on behalf of 232,000 Earn users who have over $1.2 billion in assets trapped at Genesis, a company owned and controlled by the Digital Currency Group (DCG), which is owned and controlled by you.

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As you know, DCG has been engaged in fraudulent activities. As its leader, you have cultivated and designed a culture of lies and deception, many of which are now well-documented in the public record.

What is shocking is that when I detailed how you, your employees, and DCG conspired to make multiple false and misleading statements to creditors to cover up the bankruptcy and financial condition of Genesis, including forging asset-liability statements and other documents, you did not directly address or refute any of them.

You did not explain what I got wrong or what I might have misunderstood, but completely avoided the issue and responded in the most oblique way possible, writing a letter to your shareholders that was completely dismissive and self-aggrandizing.

On January 10th, you wrote to your shareholders (some of whom are also creditors you defrauded), explaining to them and the whole world how your feelings were hurt.

The first complete thought in your almost 4,000-word letter, “I’ve done a fair amount of reflection on the past year lately…”, was a good sign. However, despite a hopeful start and all the reflection you claim to have done, you somehow forgot to address the elephant in the room with billions of dollars in it – DCG owes creditors $3.3 billion (of which $1.2 billion is owed to Earn users).

You have not apologized for the stress, anxiety, and pain that you and your family have caused us. Nor have you apologized for the damage you have done to our entire industry. However, you did tell everyone that “the past year has been the most difficult year of my life.”

At first glance, your letter seems like a masterclass in lack of self-awareness. After all, writing a letter but not addressing the allegations that prompted you to write it is a bit strange. However, upon further examination, your letter is another carefully crafted act of stupidity, completely designed to shift blame, buy time by pretending to be stupid, and try to screw over creditors and Earn users again. Allow me to explain.

After nearly eight months of communicating with you, your lawyers, and your consultants, one thing has become very clear. You never intended to do the right thing and take responsibility for the chaos your recklessness and fraud caused for you, your company, and your employees.

Instead, you spent the past eight months buying time so that you could raise funds and once again deadlock creditors and Earn users. Let me break down your game for you.

Commit fraud. In June and July of 2022, you, DCG, and Genesis intentionally lied to Earn users, Gemini, and creditors to make us all believe that DCG had absorbed the $1.2 billion loss caused by the collapse of 3AC two months earlier, in May.

In reality, DCG did not absorb these losses, but instead signed a fake long-term promissory note to make it look like they did, without giving Genesis a penny. The deal was not made in good faith. You hoped that no one would notice, but unfortunately, someone named SBF showed up and committed an even bigger fraud, exposing your fraud.

Refuse to repay the promissory note. At this point, the right thing to do would be for you and DCG to actually absorb the $1.2 billion loss, or to work out an agreement with creditors to restructure the promissory note’s terms and amounts in a way that is legal, fair, and reasonable for everyone. You chose to do neither. Instead, you pretended to go through the process of negotiating to try to fool the dumb creditors and to have DCG litigate the feasibility of the promissory note for many years to come.

Raising funds to repay the $630 million loan. Delay is crucial because it gives you time to solve the obstacle – DCG owes Genesis $630 million. This loan is like the sword of Damocles hanging over your head. Unlike the FuGazi tickets that are due in 10 years, this loan is due in May this year. If the loan cannot be paid, it will result in DCG’s default and bankruptcy.

Therefore, since November, you have been working feverishly not to compensate the creditors, but to raise funds so that you can repay the loan and litigate the tickets freely and clearly in the next ten years. You have not given up, and you must push for a better deal in any case. For you, Earn users are not people, they are numbers on a spreadsheet, and business is as usual, brother.

Abusing the mediation procedure. By May 1, DCG did not have $630 million and was about to fall off a cliff. Facing your second default and second bankruptcy in less than six months, you sought to buy time through mediation, and the creditors reluctantly agreed to give you one last chance.

Mediation can be a very effective mechanism, as long as they are operated properly, with clear structures, strict deadlines, and real consequences.

Eight weeks later, after several delays, no agreement was reached. Why? Because mediation gave DCG an indefinite deferral of paying its $630 million owed to Genesis, and it was free. This gratuitous deferral seriously harmed the creditors and Earn users in two very important ways.

First, it denied the creditors, including Earn users, the $630 million that was owed to them in May. Second, it completely destroyed the key negotiating chip of the creditors and Earn users, which was to bring you to the negotiating table, compensate for the forged acceptance bills, and avoid protracted scorched-earth litigation.

The game is over, and I’m writing to let you know that your game is over.

In addition to delaying the solution, the related costs exceeded $100 million, all of which went to lawyers and consultants, sacrificing the interests of creditors and earners, which is enough.

For this reason, we attach a best and final proposal that is fair and reasonable for everyone and represents the minimum that the creditors required to support the transaction will accept.

If you do not agree to this transaction before 4 pm Eastern Time on July 6th, we will take the following steps:

File a lawsuit against DCG and you personally: The lawsuit will be filed on July 7th. Among other things, it will outline your personal responsibility for concealing Genesis’ bankruptcy and provide a blueprint for similar lawsuits by 232,000 Earn users against you and DCG.

Propose a turnover motion: We will ask the Genesis Special Committee to fulfill its fiduciary duty and submit a turnover motion by July 7th or before, placing DCG in default and demanding immediate payment of the $630 million owed to creditors and Earn users without further delay.

Advance the non-consensual plan: We will work with the Genesis Special Committee to advance a non-negotiated plan that complies with a strict timeline and provides for immediate distribution to creditors and Earn users, with DCG’s contribution being sued.

UCC lawsuit: We will ask the Unsecured Creditors Committee (UCC) to fulfill its fiduciary duty and bring suit against DCG and Genesis entities for investigation and evidence of various inter-company loans and transactions.

Gemini looks forward to working with the Genesis Special Committee to end the mediation process, advance the bankruptcy process, and bring relief to Earn users as soon as possible.

Finally, over the past nine months, I have seen many of your and your colleagues’ misconducts, but the most disturbing thing is what you said to me this fall, you are the victim of all this.

It takes a special “person” to owe $3.3 billion to tens of thousands of people and believe or at least pretend to believe that they are the victims, even an idiot does not have the ability to have such delusions. Lastly, he at least recognizes how his actions have hurt others and is trying to make things right. I can confidently speak on behalf of all Earn users, it’s time for you to do the right thing.

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