Timid Major Players in the Coin Market... Blaming Each Other for the Troubles

Gemini Co-founder Winklevoss
Coin Lending CEO Silbert
System Shaken After FTX Incident

In the U.S. cryptocurrency industry, leaders of major coin companies, known as 'big players,' are facing backlash for shifting the responsibility of repaying over 1 trillion won in customer funds to each other after getting into trouble due to the FTX bankruptcy while running a loan business with the money entrusted by customers.

Cameron Winklevoss, co-founder of the Gemini coin exchange, and Barry Silbert, CEO of Digital Currency Group (DCG), engaged in a blame game on the 2nd (local time) over the issue of repaying $900 million (about 1.15 trillion won) in customer deposits.

Barry Silbert DCG CEO Photo by Barry Silbert Facebook Capture

On that day, Winklevoss claimed in an open letter posted on Twitter that Silbert was employing "dishonest delaying tactics" to avoid repaying customer funds related to DeFi (decentralized finance) products. Winklevoss also raised the possibility of criminal charges, alleging that DCG, operated by Silbert, borrowed $1.675 billion (about 2.13 trillion won) from subsidiaries, including customer funds, to buy back its own shares and engage in speculative trading.

In response, Silbert said he proposed a dispute resolution plan to Winklevoss's side at the end of last month but received no reply, shifting the responsibility to Winklevoss. Silbert also denied the allegations of speculative trading as 'groundless.'

Their mudslinging began with complex and risky coin financial transactions. Before the FTX incident, Gemini partnered with Genesis, a DCG subsidiary and coin lending company, to operate an interest payment program called 'Gemini Earn.'

The Winklevoss twins, founders of Gemini. Photo by AFP Yonhap News

'Gemini Earn' is a DeFi product that pays up to 8% interest when customers deposit cryptocurrency. Gemini maintained this high-interest payment system by entrusting the digital assets deposited by customers to Genesis, which runs a cryptocurrency lending business. This symbiotic relationship rapidly collapsed due to the downfall of FTX, one of the world's top three cryptocurrency exchanges.

Genesis, facing the risk of losing money from the bankrupt FTX, cited liquidity shortages and halted new coin loans and interest repayments in November last year. Gemini also froze withdrawals of 'Gemini Earn' customer deposits due to this impact, and Winklevoss was sued on fraud charges.

The Wall Street Journal (WSJ) pointed out, "The verbal battle between the two deals another blow to the industry, which is trying to restore trust after the FTX incident."

This content was produced with the assistance of AI translation services.