Particular person crypto companies and their (cough) associated events usually have greater than a whiff of the ouroboros about them. However the trade as entire principally resembles the spidermen circle of blame meme lately.
The most recent instance got here earlier in the present day, when Cameron Winklevoss of Gemini revealed an “open letter” to fellow crypto baron Barry Silbert of Digital Forex Group about $900mn that Gemini customers are owed by DCG’s Genesis unit, which suspended withdrawals final yr.
Other than performative hand-wringing about Gemini clients just like the “single mother who lent her son’s training cash to you” and a “father who lent his son’s bar mitzvah cash to you”, probably the most incendiary bit was this (FTAV’s emphasis beneath):
The thought in your head that you would be able to quietly disguise in your ivory tower and that it will all simply magically go away, or that that is another person’s drawback, is pure fantasy. To be clear, this mess is completely of your individual making. Digital Forex Group (DCG) — of which you’re the founder and CEO — owes Genesis (its wholly owned subsidiary) ca $1.675 billion. That is cash that Genesis owes to Earn customers and different collectors. You took this cash — the cash of schoolteachers — to gasoline grasping share buybacks, illiquid enterprise investments, and kamikaze Grayscale NAV trades that ballooned the fee-generating AUM of your Belief; all on the expense of collectors and all on your personal private achieve. It’s now time so that you can take duty for this and do the proper factor.
Sound acquainted?
Silbert understandably couldn’t let the thinly-veiled FTX innuendo cross, and responded on Twitter contained in the hour.
DCG didn’t borrow $1.675 billion from Genesis
DCG has by no means missed an curiosity fee to Genesis and is present on all loans excellent; subsequent mortgage maturity is Could 2023
DCG delivered to Genesis and your advisors a proposal on December twenty ninth and has not obtained any response
— Barry Silbert (@BarrySilbert) January 2, 2023
Silbert has already revealed that DCG has borrowed $575mn from Genesis “within the extraordinary course of enterprise” and “at all times structured on an arm’s size foundation and priced at prevailing market rates of interest”.
The disagreement appears to return all the way down to how one views the $1.1bn promissory observe due in 2032 that DCG issued to Genesis when the guardian needed to step in to imagine liabilities associated to the implosion of crypto “hedge fund” Three Arrows. On this matter it’s price studying Kadhim Shubber, Nikou Asgari and Josh Oliver on the “delicate links” between the varied elements of the struggling DCG empire.
In associated information, DCG’s flagship crypto product — the Grayscale Bitcoin Trust — now trades at a forty five per cent low cost to its internet asset worth.
So long as you’re not one of many crypto bros immediately affected by the shenanigans, it’s all very grimly amusing.
