Crypto Meltdown Leaves Winklevoss Twins’ Gemini ‘Severely Tarnished’

(Bloomberg) — The signs of a full-blown crisis were everywhere. Bitcoin was in free fall, hedge fund Three Arrows was blowing up and the fates of several high-profile crypto lenders were suddenly in doubt.

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Yet as panic spread like wildfire last June, the Winklevoss twins, founders of the Gemini crypto exchange, hit the road with their rock band, Mars Junction. With Tyler on vocals and Cameron on guitar, they belted out hits like Don’t Stop Believin,’ appearing untroubled as other firms — propped up by easy money, rampant speculation and possibly even fraud — crumpled one after the next.

And why not? The brothers, who turned their erstwhile Facebook millions into crypto billions, were bona fide believers who survived previous downturns. With Gemini, they set out to prove to the world they were the ones investors could trust. Throughout the summer, they stood behind their own lending product, Gemini Earn — which raked in billions in deposits with interest rates up to 8% — even as trouble began to engulf their sole Earn partner, Genesis Global.

Yet two months after Genesis suddenly halted withdrawals and forced the twins to pause redemptions on Earn accounts, it’s harder than ever to believe their customers will recoup the $900 million that is still stuck in limbo.

“The Winklevoss brand is severely tarnished,” said Aaron Brown, a crypto investor who writes for Bloomberg Opinion.

On Tuesday, Cameron Winklevoss accused Barry Silbert, whose company owns Genesis, of defrauding Gemini Earn customers and called on his company’s board to remove him, deepening the acrimony between the onetime business partners. In a separate notice to Earn customers, Gemini said it terminated their loan agreements with Genesis, a move that officially ends the Earn program and requires Genesis to return all outstanding assets immediately.

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In an interview on Tuesday, Cameron Winklevoss said he and his twin brother are “working around the clock to find a resolution for all Earn users.” He added that “we believe in this space. This…


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