Winklevii Hit Back at $282 Million Gemini Withdrawal

Reading Time: 2 minutes
  • The Winklevoss twins have refuted claims in a New York Post article that they secretly withdrew $282 million from their exchange
  • The New York Post reported that a $282 million withdrawal took place on the platform in August, right when Gemini user funds are trapped with Genesis
  • Gemini strongly rebutted the article, deeming it “pure fantasy” and accusing DCG CEO Barry Silbert of engineering the story

The Winklevoss twins have hit back at a New York Post article which claimed that the pair “secretly withdrew” $282 million from their exchange, Gemini, when $900 million of Gemini user funds became trapped on the Genesis platform. Co-founders Cameron and Tyler Winklevoss used the company’s X account to clarify that the funds were moved to a “liquidity reserve”, a backup fund whose access is ultimately controlled by customers. They also took a dig at Digital Currency Group CEO Barry Silbert for planting the story.

Founders Accused of Priorisiting Own Financial Comfort

The Post reported yesterday that it had seen a raft of documents including a balance sheet showing Gemini deposits on Genesis had declined by roughly $176 million between August 5 and 10 of last year. The five-day window included a $282 million withdrawal, which was partially offset by customer deposit inflows and fluctuations in cryptocurrency prices, sources said.

The withdrawal was made in the form of 3,120 BTC, 18,060 ETH, 142 million GUSD and almost 50 million DOGE, as well as other cryptocurrencies. The post cited a source as saying:

They pulled out their own money, whether that’s corporate funds or their own personal [funds] — only a few months before Genesis announced they were putting up the gates and customers would not be able to withdraw their assets. They decided they were comfortable for the Earn customers but not comfortable for themselves.

“Pure Fantasy”

This narrative has been challenged in a lengthy X post from Gemini, which stated that the $282 million withdrawal was not a covert action but rather a strategic measure. They clarified that the funds were shifted to a liquidity reserve designated for Gemini Earn, which serves the purpose of expediting loan callbacks and withdrawal requests by holding back a portion of customer funds allocated for loans. Customers grant authorization for Gemini to adjust this reserve as necessary.

Gemini further asserted that the move to withdraw $282 million from Genesis was an increase in the liquidity reserve, which, in turn, reduced the company’s exposure. The company categorically denied any wrongdoing and accused DCG, the parent company of Genesis, along with its CEO Barry Silbert, of orchestrating the story in the New York Post.

The company went further, describing the allegations as “pure fantasy” and highlighting the irony that a decision aimed at safeguarding Earn users’ funds had been distorted. The exchange characterized the article as “another brazen attempt to manipulate public opinion.”

This controversy is the latest development in an ongoing dispute involving Gemini, Genesis, and DCG over funds belonging to Earn customers, adding to the acrimony, confusion and legal back and forth surrounding the issue.