Cameron Winklevoss calls for DCG to fire chief in spat over crypto debts

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 an 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 previously 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.

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 placed through Gemini’s “earn” programme, 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 Winklevoss called on the group’s board to sack Silbert immediately. The twins do not own a stake in DCG, limiting their capacity to force Silbert’s hand.

“This is another desperate and unconstructive publicity stunt from Cameron Winklevoss to deflect blame from himself and Gemini, who are solely responsible for operating Gemini ‘earn’ and marketing the programme to its customers,” DCG said.

DCG added that the group was “preserving all legal remedies in response to these malicious, false and defamatory attacks”.

Connecticut-based DCG’s web of intra company loans, and investments, previously revealed by the Financial Times, has 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 last summer. It matures, delivering the cash to Genesis, in 2032.

Cameron 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 to repay creditors. Last week, Genesis laid 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 Silver Lake, 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.