Cameron and Tyler Winklevoss, more commonly known as the Winklevoss Twins, first shot to fame during their much-publicized battle with Mark Zuckerberg over control of Facebook. The twins got a nice payout in that deal, receiving about $65 million in cash and stock during the 2008 settlement. Now, they're in the midst of another legal fight, this one surrounding their crypto company Gemini.
According to reports, the brothers withdrew $282 million from their company's bank, Genesis, a few months before Gemini froze around $900 million in customer deposits. Gemini had to suspend any withdrawal activity after the Sam Bankman-Fried FTX fiasco last November. Billionaire Barry Silbert runs Digital Currency Group, which owns Genesis. And he thinks something's fishy with the timing of how these trades went down.
A balance sheet showed a $176 million decline between August 5 and August 10, 2022. That timeframe featured the $282 million withdrawal, which was partially recouped by fluctuating crypto valuations and customer deposits. The New York Post got access to an email breaking down the withdrawal: 3,120 Bitcoins, 18,060 ether, and 49.6 million Dogecoins — Elon Musk's favorite meme currency that was worth roughly six cents apiece at the time.
The Winklevoss Twins also withdrew 142 million units of their own company's "Stablecoin." That crypto is impacted by the U.S. dollar.
Cameron (L) and Tyler Winklevoss (Justin Sullivan/Getty Images)
The Winklevoss twins sued Silbert and the Digital Currency Group in July, claiming Silbert gave a "false, misleading, and incomplete representation" of the state of Genesis's business. The twins say they tried to get out of a partnership with Genesis in October 2022 over the Gemini Earn program, which promised to pay customers interest on their digital currency deposits. However, Silbert persuaded them to stay on board.
Less than a month later, FTX was exposed — and took Genesis down with it.
This whole situation is complicated by the fact that there are very few laws around cryptocurrency trading, apps, and other products. In fact, many court cases are currently open, meaning any decisions surrounding this case would likely be based on at least some guesswork.
Still, the timing of the Winklevoss twins' move to withdraw $282 million does raise some questions. And it doesn't help that they were able to get their money out while customers had to wonder if they'd ever get to access nearly $1 billion in deposits.
