Cameron Winklevoss has called for the board of conglomerate Digital Currency Group to oust its chief executive, in a growing spat over debts stemming from last year’s FTX crypto shock.
In a second open letter published on Tuesday, Winklevoss, who runs crypto exchange Gemini with his twin brother Tyler, reiterated his call for DCG boss Barry Silbert to pay back debts including $900mn in Gemini client funds that are stuck in one of DCG’s units. Cameron had given Silbert a January 8 deadline to commit to solving the matter.
The cash demands underline how last year’s collapse of crypto exchange FTX continues to hurt the industry’s close-knit web of prominent firms and personalities in this self-styled decentralised market.
DCG did not immediately respond to a request for comment on the letter.
The conglomerate’s troubles stem from its subsidiary Genesis, a crypto broker, which allowed customers to lend out their coins for high yields. After the collapse of FTX in November, Genesis suspended customer withdrawals, including some funds stemming from Gemini, and hired Moelis investment bankers to help explore its options.
Last week, Silbert said DCG had not received a response to its own proposals to Winklevoss and other creditors, which include Dutch exchange Bitvavo and crypto savings firm Donut.
In a new public letter on this matter published on Tuesday, Cameron called on the group’s board to sack Silbert immediately. The Winklevoss twins do not own a stake in DCG, limiting their capacity to force Silbert’s hand.
DCG’s web of intra company loans, and investments, previously revealed by the Financial Times, has further complicated the picture for creditors.
The core issue is a $1.1bn promissory note that DCG issued directly to Genesis when it assumed the broker’s liabilities following the collapse of crypto hedge fund Three Arrows Capital in summer 2022. It matures, delivering the cash to Genesis, in 2032.
Cameron Winklevoss wrote on Tuesday that DCG had not “given Genesis so much as a penny of actual funding”, saying the promissory note “did nothing to improve Genesis’s immediate liquidity position or make its balance sheet solvent”.
DCG has been attempting to raise money by cutting costs, including Genesis laying off 30 per cent of its staff.
The New York-based group was founded in 2015 by Silbert and is one of the industry’s largest and earliest investors in crypto tokens and companies.
DCG’s board comprises several high-profile investors including Lawrence Lenihan, co-founder of venture capital company FirstMark Capital. Glenn Hutchins, co-founder of private equity group SilverLake, resigned from the board in November, according to people familiar with the matter. He declined to comment. Former US treasury secretary Larry Summers was also a DCG adviser on macroeconomic matters — a role from which he also stepped down in recent days.