Gemini's Cameron Winklevoss Slams Crypto Exec Barry Silbert Over Frozen Funds (bloomberg.com) 51
Crypto entrepreneur Cameron Winklevoss is accusing fellow businessman Barry Silbert of "bad faith stall tactics" in resolving a dispute between their two companies that grew out of the collapse of FTX. From a report: Gemini, owned by Winklevoss and his twin brother, paused redemptions on a lending product called Earn. It had offered investors the potential to generate as much as 8% in interest on their digital coins -- by lending them out to Genesis Global Capital, one of the companies owned by Silbert's Digital Currency Group (DCG). Genesis owes Gemini's customers $900 million, Winklevoss said in an open letter to Silbert.
The Earn halt came in November, after Genesis revealed it had $175 million locked in an account on Sam Bankman-Fried's bankrupt FTX crypto exchange. Genesis, which suspended both redemptions and new loan originations at the lending unit, has told clients that it could take "weeks" to find a path forward. Winklevoss, facing pressure of his own from angry customers locked out of their Gemini accounts and a lawsuit alleging fraud, said he had provided Silbert with multiple proposals to resolve the issue, including most recently on Dec. 25. "Despite this, you continue to refuse to get into a room with us to hash out a resolution," Winklevoss wrote. "In addition, you continue to refuse to agree to a timeline with key milestones. Every time we ask you for tangible engagement, you hide behind lawyers, investment bankers, and process. After six weeks, your behavior is not only completely unacceptable, it is unconscionable." Silbert's response: "DCG did not borrow $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023. DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response."
The Earn halt came in November, after Genesis revealed it had $175 million locked in an account on Sam Bankman-Fried's bankrupt FTX crypto exchange. Genesis, which suspended both redemptions and new loan originations at the lending unit, has told clients that it could take "weeks" to find a path forward. Winklevoss, facing pressure of his own from angry customers locked out of their Gemini accounts and a lawsuit alleging fraud, said he had provided Silbert with multiple proposals to resolve the issue, including most recently on Dec. 25. "Despite this, you continue to refuse to get into a room with us to hash out a resolution," Winklevoss wrote. "In addition, you continue to refuse to agree to a timeline with key milestones. Every time we ask you for tangible engagement, you hide behind lawyers, investment bankers, and process. After six weeks, your behavior is not only completely unacceptable, it is unconscionable." Silbert's response: "DCG did not borrow $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023. DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response."
Odd Topics (Score:2)
Re:Odd Topics (Score:4, Insightful)
Slashdot helped create this monster that lead many of its readers into ruin, it's only fitting they cover the collapse with the same rigor.
Re:Odd Topics (Score:4, Interesting)
Quite true,
I remember seeing articles on Slashdot about Bit coin when the Bit Coins had no value at all. However everyone was praising on how great they are going to be. Praising companies that accepted bitcoin as being forward thinking...
However the old days of Slashdot where stories about fun inventions or cool hobbies is no longer a thing. As when those few stories do pop up from time to time, they just get shot down with huge amount of negativity.
If /. had been around long enough (Score:2)
Yeah if you have a new technology that nobody knows much about us tech nerds are going to get excited about it. If later we learn that the technology is crap we're going to lose that excitement.
Crypto is crap. It's completely centralized around a handful of miners and exchanges who are operating is unregulated banking institutions. We are also old enough to know that if you let that kind of unregulated finance go for too long it'll eventu
Re: (Score:2)
As when those few stories do pop up from time to time, they just get shot down with huge amount of negativity.
Not really. Slashdot has always been sceptical of bad technologies, even as we discuss the neat concepts behind them. Take a look at this post from 2010 on v0.3 of Bitcoin https://news.slashdot.org/stor... [slashdot.org] note a few discussion around the concept of the blockchain, and the overwhelmingly negative (and in retrospect incredibly accurate) discussion about the absurdity of replacing fiat currencies, deregulation, and burning CPU cycles for math.
If anything the Slashdot of old was a bit too naive and optimistic.
Re: (Score:1)
If you believe that, I have an excellent real estate investment opportunity for you. It's adjacent to both Manhattan and Jersey City, sees an enormous amount of traffic every single day, and is so famous they named a country after it!
Re: (Score:2)
How that kind of thing going in Indiana?
https://showmeinstitute.org/bl... [showmeinstitute.org]
https://usa.streetsblog.org/20... [streetsblog.org]
Re: (Score:3, Informative)
Only idiots will buy stuff or sell stuff with BitCoins. It is a too volatile currency. Your best bet is to Buy Low and Sell High, and get the more stable USD from it, at the best times to buy stuff. If you got yourself a car for a BitCoin, and the price doubles in the next month, than you had in essence lost a lot of money, and the value sold you the car for twice the value. Or if the price drops then the seller probably won't make a profit from the sale.
Re: Odd Topics (Score:3)
What a silly comment.
If you sell Bitcoin for USD to buy a car, then the price doubles, you're in the same boat.
And pretty much no seller holds Bitcoin. It's used as a payment network. The seller gets dollars in their account pretty much immediately. They bear no exchange risk unless they really want to hold Bitcoin because they believe in it.
There are two primary types of consumers who hold Bitcoin and use it make purchases.
The first is using it for big ticket items. These consumers tend to spend during the
Re:Odd Topics (Score:4, Interesting)
While "cryptography" is core to the world economy, "cryptocurrency" has never been core to the broader economy. In the last four years it has, however, been core to wildly speculative get-rich-quick schemes and money laundering. The losses to Wall Street will be small enough that the big players won't suffer. Many of the marks for the crypto scams will loose their life savings, which will be bad for those who were taken in. As for the rest of Main Street, if cryptocurrency were to go away and it made life harder for ransomware gangs and fentanyl labs, that would be a very welcome effect.
Re: (Score:2)
LOL. No it isn't. Not by an incredibly long shot. The entire invested interest in all combined crypto on the entire planet is less than 2 weeks of the GDP of the USA alone. There are single companies more valuable than the global crypto market.
Purging crypto from the market will affect a few displaced investors, nothing more.
Re: Odd Topics (Score:3)
Because it engages you enough to comment.
A curious choice of words. (Score:4, Funny)
Re: (Score:1)
can stretch to encompass effectively anything, so in absence of a jargon meaning it seems like a superfluous word.
We call that Goatse in these parts, son.
Re: A curious choice of words. (Score:2)
I don't know if it has a special legal meaning, but it does have the common meaning of being something which is unreasonable.
Something can be reasonable yet unacceptable to one party. Restocking fees, for example, are generally seen as a reasonable policy, but may be unacceptable to customers.
In legal land, perhaps this translates into something specific in a contract or some such thing.
Re: (Score:2)
Legally "unjust" or "one sided".
Re: (Score:1)
As a matter of fact it does have a legal definition. .2. (Of an act or transaction) showing no regard for conscience; affronting the sense of justice, decency, or reasonableness . Cf. CONSCIONABLE. [Cases: Contracts 1.C.J.S. Contracts ÂÂ 2â"3, 9, 12.]
Black's Law Dictionary, 8th Edition:
unconscionable
(É(TM)n-kon-shÉ(TM)-nÉ(TM)-bÉ(TM)l), adj.1. (Of a person) having no conscience; unscrupulous
Re: (Score:2)
For companies, we expect them to act selfish, only looking out for their own benefit and so on, so we expect some bad behaviours. "Unconscionable" are things that are so outrageously bad that they cannot be excused with normal company behaviour.
Re: (Score:2)
Winklevosses really know how to pick business part (Score:4, Insightful)
It seems the Winklevosses really know how to pick business partners and industries, eh?
Re:Winklevosses really know how to pick business p (Score:4, Insightful)
From what I know about the Winklevosses, I am less inclined to believe much of what they say now. This is my understanding of the situation: Gemini as part of their business model loans coins to Genesis Global Capital (GCG) which is owned by Silbert. Gemini's investors who want to cash out due to the cryptocurrency crash. However, Gemini is locked out of $175M in a FTX account. Gemini appears to needs funds but are whining (IMO) that GCG is not helping them out.
Here's the missing detail I do not know: 1) Is GCG in any way delinquent on the their loans? 2) Does Gemini have a clause to recall the loaned coins in their contract with GCG? From Silbert's response it seems that the first answer is no. Given the fact that Winklevosses seems to be bitterly complaining about it, I would presume the second answer is also no. If Gemini had a clause to recall, they simply would have exercised it and then complained about GCG breaching a contract rather than GCG not working with them.
Re: (Score:2)
I certainly don't find the fake outrage for getting lawyers and bankers involved over more than hundred million dollars very convincing. You can't expect to deal with sums like that and not expect people to play hardball.
Re: (Score:2)
Hahaha! Conmen whining about conmen (Score:4, Insightful)
"I con people in good faith.
You're conning people in bad faith."
A pox on all their disgusting houses.
Re: (Score:3)
Or to put it another way:
Winklevoss #1: "He can't do that to our customers."
Winklevoss #2: "Only we can do that to our customers."
One big soap opera... (Score:4, Interesting)
It is interesting being an observer to see who goes after whom with regard to cryptocurrency-based drama. Especially because of all the bridges, and deals created when BTC was around 41k this time last year, and people were making money hand-over-fist from nothing.
Now that the pyramid isn't getting many people on the lower floors, it will be interesting how cryptocurrencies morph.
Overall, it is amazing how many individuals got into cryptocurrency without any real thought, then their holdings either disappeared, or rendered inaccessible by an exchange. For example, if one wants decent security, it is going to cost at least $600 for at least two solid hardware crypto wallets (I tried a number, best is the Trezor Model T, IMHO, just because it is easier to type your PIN and validate stuff on the device), as well as 2-3 metal "wallets" to stamp your BIP-39 mnemonic code on to ensure recoverability even if all the devices were lost, with those being placed in secure locations [1].
Without hardware security and a non-custodial wallet, it only is a matter of time before one's holdings get compromised.
[1]: A floor safe in a storage for rent, with permission from the storage owner goes a long way, for example. Not many people are going to randomly ransack a storage unit, and then try their luck against a burglary resistant container.
Re: (Score:2)
Re: (Score:3)
Alternate headline: (Score:5, Insightful)
Two monkeys in a cage throw shit at each other.
A battle of scammers (Score:2)
Re: A battle of scammers (Score:2)
How many wealthy Americans have you seen pull of a cryptocurrency exit? Zero?
*yawn*
Re: Gemini? (Score:2)
Irony alert.
Re:Gemini? (Score:4, Insightful)
Re: (Score:2)
I guess the Winklevoss twins named their company after Gemini because they are twins.
Why not both? Twins can be crazy too.
Sucker born every minute (Score:2)
"It had offered investors the potential to generate as much as 8% in interest on their digital coins "
Isn't this the pitch every con uses?
If it seems to be too good to be true, it almost certainly isn't.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
The Winklevoss brothers are born losers (Score:2)
They managed to get in early on the human tragedy that is Facebook and yet completely lose out on the obscene profits it generated - and to that other human tragedy Zuckerberg no less.
And now - surprise surprise - we find them running a tragic financial scam and ending up on the losing side of the fence again.
I wish they started a consultancy firm: I would contract them to figure out what I should invest in, and then I'd turn around and do the exact oppositeb for guaranteed profits.
The scam! You are not doing it right! (Score:2)
At least that is what I get from this...
Crypto fine print (Score:2)
What? (Score:2)
People in the crypto world performing bad-faith actions? I'm shocked, I tell ya!
Eat shit? (Score:2)
2 more crypto firms heading to failure (Score:2)
Karma is a MOFO for the Twinklevossi (Score:1)
Considering how they treated their customers, karma is really hitting home now.
Was this all about one loan? (Score:2)