Gemini co-founder Cameron Winklevoss once contemplated merging with Digital Currency Group (DCG) and its cryptocurrency lending firm Genesis Global Capital (GGC), with the potential to create a publicly-listed powerhouse that could rival Coinbase and FTX, according to an email from DCG’s CEO Barry Silbert. The email, which was shared by DCG’s lawyers as part of a motion to dismiss a $3 billion fraud lawsuit, was used to refute allegations that Silbert was aware of Genesis’ insolvency and sought to conceal it from counterparties. Instead, the email suggested Silbert’s interest in a closer partnership and merger between the companies. Silbert believed that such a merger would be of great interest to investors and could lead to a public listing within two years, creating a dominant force in the industry. However, despite the initial discussions, the merger never materialized.
At the time of the lunch meeting where the merger was discussed, Gemini and Genesis had been involved in a lending partnership for 18 months. However, GGC was facing significant losses due to its exposure to Three Arrows Capital, which eventually collapsed. Silbert was open with Winklevoss about GGC’s financial difficulties, emphasizing the need to prevent a bank run, as it would make it extremely challenging for the firm to find replacement liquidity. Silbert expected Winklevoss to consult with his twin brother Tyler Winklevoss and provide feedback on how to proceed with the potential merger.
However, the plans fell through, and subsequent events further complicated the situation. GGC paused all withdrawals, including those from Gemini’s Earn program, due to the market turmoil caused by FTX’s unexpected collapse. Ultimately, GGC filed for bankruptcy in January 2023, leaving Gemini’s 232,000 Earn customers owed $1.2 billion.
Since then, Winklevoss has expressed intentions to sue Silbert and accused him of fraudulent behavior through a culture of lies and deceit.