The controversy surrounding the cryptocurrency giant Digital Currency Group (DCG) gained new developments. After Barry Silbert, founder and CEO of DGC, was accused of “using bad faith tactics” by Gemini’s Cameron Winklevoss, the parent company of Grayscale Investments and Genesis Trading is facing new allegations. This time, they come from Zhu Su, founder of the hedge fund Three Arrows Capital (3AC), which went bankrupt last year. In a series of tweets, Su claimed that DCG colluded with exchange FTX to crash the price of LUNA and stETH tokens. This was possible because, according to Su, FTX founder Sam Bankman-Fried was on the board of DCG subsidiary Genesis, which later provided the first loan secured by FTT tokens.
Here’s rough summary of dcg situation 1) they conspired w FTX to attack Luna and steth and made a fair bit doing so 2) they took substantial losses in the summer from our bankruptcy as well as Babel, and other firms involved in gbtc 3) they could’ve calmly restructured then — Zhu Su 🔺 (@zhusu) January 3, 2023
“Here is a rough summary of the DCG situation. 1) They conspired with FTX to attack Luna and stETH and made a lot of money doing it. 2) They suffered substantial losses in the summer from our bankruptcy, as well as that of Babel and other companies involved in the GBTC [Bitcoin Trust da Grayscale]. 3) They could have calmly restructured”.
‘DCG value is zero’, says Founder of 3AC
As Su pointed out, both DCG and FTX suffered heavy losses when 3AC went bankrupt following the Earth collapse (LUNA). The “contagion” caused problems for other companies involved in the GBTC, including Babel Finance. In the aftermath, Su claimed that instead of calmly restructuring, the DCG “manufactured a callable promissory note that magically filled the hole.” “This is like a kid losing at poker and saying ‘I’m fine, my dad will pay you, let me keep playing’ but if your dad is yourself,” he wrote. Su also accused DCG and FTX of using different techniques to attack hedge fund 3AC. Furthermore, he further alleged that DCG spent six months taking more deposits while it was insolvent, in the expectation that the market would rise. “DCG value is 0, criminal fraud, FTX creditors also have a case of fraudulent transfer of capital returns from Alameda to Genesis,” he said. “Genesis’s creditors will bankrupt him and take the remaining assets in the next few days anyway. They are likely demanding that Barry return his loot the easy way rather than waiting for a criminal prosecution from the DoJ with restitution penalties.”
Fight between Winklevoss and Silbert
Accusations against the DCG are coming from far and wide. As CriptoFácil reported, Gemini co-founder Cameron Winklevoss accused Silbert of “bad faith tactics” in resolving a dispute between the two companies triggered by the collapse of FTX. In November 2022, Gemini had to stop redemptions of its Earn loan product because Genesis Global Capital, a partner in the business, had to stop withdrawals and new loan originations due to the impacts of the FTX bankruptcy. In a Jan. 2 letter to Silbert, Winklevoss said Gemini had tried to reach a resolution with the executive and the company on several occasions, but had failed. According to Winklevoss, Genesis owes Gemini customers $900 million. Winklevoss has given the company a January 8 deadline to resolve issues with its customers.
Investors accuse DCG of hiding insolvency
As if that were not enough, DCG is being accused by three Gemini customers of having used fraudulent operations to hide from the public that Genesis became insolvent in mid-2022. Earn. Furthermore, they claimed that Genesis engaged in fraudulent action with DCG to conceal its insolvency. In this process, the company would have obtained a promissory note of US$ 1.1 billion due in 2033. In return, it would have a debt of US$ 2.3 billion that would have been contracted by Genesis with 3AC. Read also: Genesis Block: 14 years ago, the first Bitcoin block was mined Read also: Solana: After 30% increase, where is the price of cryptocurrency going? Also read: Federal Council of Real Estate Brokers authorizes the registration of documents on the blockchain
