Barry Silbert Rebuts ‘Bad Faith’ Claims

Barry Silbert, the CEO of Digital Currency Group (DCG), has denied employing “bad faith stall tactics” in a duel pitting DCG against the Gemini Exchange’s Cameron Winklevoss, whose firm is trying to retrieve $900 million of deposits their clients placed with Genesis.

Clients unable to access their funds

DCG is currently in the crosshairs of the rest of the crypto industry, and rumors about a looming Genesis bankruptcy and federal investigations are fueling the allegations.

The contest with Winklevoss gravitates around allegations regarding a loan Barry Silbert extended to Genesis to the defunct crypto hedge fund Three Arrows Capital (3AC): 3AC owed Genesis more than $1 billion when it tanked last year. As the two crypto entrepreneurs continue bickering, Gemini’s clients have been unable to access their funds for at least six weeks.

Genesis and Gemini partnered about two years ago. They launched a high-yield crypto product called Earn, through Gemini, that offered up to 8% ROI on customer deposits. Gemini exchange lent funds from Earn to Genesis, which the latter placed on numerous trading platforms and borrowers. The relationship flourished throughout 2020 and 2021 as the crypto market thrived, but matters went haywire in 2022 when the crypto market dithered, causing the Earn model to fall apart.

Gemini halted all withdrawals last November at the height of the FTX crisis to the chagrin of more than 340,000 of its retail clients, some of whom are seeking legal redress.

Barry Silbert is the public face of DCG

Barry Silbert, the public face of DCG, has never shied away from using Twitter or interviews to opine on the crypto market. The career investment banker is among the pioneer investors in blockchain firms around 2013 and established DCG in 2015; the firm has so far invested in more than 200 crypto startups.

According to Forbes magazine, the Emory University’s Goizueta Business School alumnus had a net worth of $3.2 billion and was the eighth-richest crypto investor in April 2022.

Apart from Genesis, DCG's lending arm, the $10 billion company has a stake in digital asset manager Grayscale besides owning crypto mining firm Foundry Services, trade publication Coindesk, digital asset platform Luno global, and crypto index provider TradeBlock. Apart from its association with the defunct 3AC, Genesis joins the list of firms suffering from FTX contagion as its derivative business is said to have had over $175 million locked in an FTX trading account.