3AC CEO Predicts How War Between DCG / Genesis Will End
Su Zhu, a co-founder of Three Arrows Capital, has spoken out in a Twitter thread about the escalating crypto war between Digital Currency Group (DCG) CEO Barry Silbert and the Winklevoss twins, founders of US exchange Gemini. As Bitcoinist reported yesterday, Cameron Winklevoss published an open letter denouncing Silbert’s misconduct, while setting a deadline for a solution until January 8.
You took this money – the money of schoolteachers – to fuel greedy share buybacks, illiquid venture investments, & kamikaze NAV trades that ballooned the fee-generating AUM of your Trust…. all for your own personal gain.
Zhu jumps on this bandwagon, explaining that DCG, the parent company of the Grayscale Bitcoin Trust (GBTC), conspired with FTX to attack Luna and stETH and made “a lot” of money in the process. In addition, DCG suffered significant losses over the summer from the bankruptcy of 3AC, as well as from Babel and other firms involved in GBTC, he says.
“They could’ve calmly restructured then. Instead, they fabricated a left pocket right pocket callable promissory note that magically filled the hole. This is like a kid losing at poker and saying ‘I am fine, my dad will pay you, let me keep playing,’ but if your dad is actually yourself,” Zhu continued to assess.
Zhu also alleges that Silbert misled Three Arrow Capital for months, “using various methods to attack us and also not have anyone ask the hard questions which are how did Genesis fill the hole.”
But that’s not all. Zhu goes on to claim that even though they – FTX and DCG – were insolvent, they accepted more deposits in hopes the market would rise and eliminate the issue. Ultimately, according to the 3AC CEO, DCG’s value is 0, and “most OGs” know this and “how close Barry and SBF have been since beginning.” SBF was on the board of Genesis. In addition, Genesis gave the first FTT-secured loan to SBF.
For the next few days, Zhu paints a grim picture of Genesis. According to him, Genesis’ creditors will file for bankruptcy in the coming days and seize DCG’s remaining assets.
[T]hey are likely demanding Barry pays back his cashouts the easy way instead of waiting for a DoJ criminal case with restitution punishments.
Is DCG Screwed?
Barry Silbert had already commented yesterday on the allegations made by Cameron Winklevoss, stating that DCG has not borrowed $1.675 billion from Genesis, has never missed an interest payment to Genesis, and is current on all outstanding loans, with the next loan due in May 2023.
Further, Silbert disclosed that DCG made an offer to Genesis and its advisors on Dec. 29 and has yet to receive a response. Harsh criticism came from the crypto community for these statements.
So Gemini gave the money to Barry (Genesis), who then gave the money to Barry (DCG), who then gave the money to Barry (Grayscale)?
— db (@tier10k) January 2, 2023
Another voice comes from Autism Capital: “Winklevoss’ and Barry Silbert going at it. Winklevoss’ want an answer for how to move forward for their Gemini Earn customers (that used Genesis for their program) but Barry is hiding behind technicality, legal jargon, and probably a sandwich. DCG is turbo cooked, Barry, face it.”
Meanwhile, the Bitcoin price is remaining relatively stable at $16,669.
Featured image from Vanity Fair / CNBC, Chart from TradingView.com
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