Gemini’s Potential Juggernaut Partnership with Genesis Goes Up in Smoke

Gemini co-founder Cameron Winklevoss and Digital Currency Group (DCG) were once considering a merger with DCG’s cryptocurrency lending firm, Genesis Global Capital (GGC). This merger had the potential to create a powerful competitor to platforms like Coinbase and FTX. DCG CEO Barry Silbert mentioned this merger idea in an email to colleagues in October 2022, just three months before Genesis went bankrupt. The email was shared as part of a motion to dismiss a $3 billion fraud lawsuit filed by the Attorney General of the State of New York against DCG and Silbert.

The email was used to refute allegations that Silbert knew about Genesis’ financial troubles and wanted to hide them from others. In the email, Silbert expressed his interest in a closer partnership between Genesis, Gemini, and DCG, including the possibility of merging the companies. He believed that such a merger would excite investors and could potentially raise $1 billion, leading to a public listing within two years. Silbert pitched the idea to Winklevoss, highlighting the potential for Gemini to become the largest cryptocurrency custody provider worldwide and compete with Coinbase and FTX.

At the time of the lunch meeting, Genesis and Gemini were already closely connected through a cross-platform lending partnership that had been ongoing for 18 months. GGC was facing significant losses due to its exposure to now-collapsed Three Arrows Capital. Silbert was honest with Winklevoss about GGC’s financial difficulties, which Winklevoss apparently took well. Silbert emphasized the importance of avoiding a bank run and urged Genesis to prevent any potential bankruptcy that could hinder DCG’s ability to raise funds.

After the meeting, Winklevoss was expected to discuss the merger idea with his twin brother, Tyler Winklevoss, and provide feedback on how to proceed. The merger did not happen. In February 2021, Gemini launched its “Earn” program, allowing customers to lend their coins to GGC in exchange for interest payments. Unfortunately, one month after the aforementioned email, GGC suspended withdrawals due to market instability caused by FTX’s collapse. GGC eventually filed for bankruptcy in January 2023, leaving Gemini’s Earn program customers owed $1.2 billion.

Since then, Cameron Winklevoss has threatened legal action against Silbert multiple times and accused him of fraudulent behavior and cultivating a culture of deceit and lies.