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Tyler Winklevoss, chief executive officer and co-founder of Gemini Trust Co., left, and Cameron Winklevoss, president and co-founder of Gemini Trust Co., speak during the Bitcoin 2021 conference in Miami, Florida, U.S., on Friday, June 4, 2021.

Eva Marie Uzcategui | Bloomberg | Getty Images

Cameron Winklevoss and Barry Silbert were both early believers in bitcoin who made a fortune on their investments and built big businesses along the way. For nearly two years, they enjoyed a mutually beneficial partnership that made their customers a lot of money.

Now, the bitcoin heavyweights are in a bruising war of words that illustrates the depths of the crypto crisis and underscores the risks that were ultimately shouldered by ordinary investors who got caught up in a massively unregulated market. As it stands, hundreds of millions of dollars of customer cash sits in inaccessible limbo as the two crypto entrepreneurs battle over who is responsible.

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Silbert is the founder of Digital Currency Group (DCG), a crypto conglomerate that includes the Grayscale Bitcoin Trust and trading platform Genesis. Winklevoss, along with his brother Tyler, co-founded Gemini, a popular crypto exchange that, unlike many of its peers, is subject to New York banking regulation.

Winklevoss and Silbert were linked through an offering called Earn, a nearly two-year-old product from Gemini that promoted returns of up to 8% on customer deposits. With Earn, Gemini loaned client money to Genesis for placement across various crypto trading desks and borrowers.

As the digital coin markets soared in 2020 and 2021, that capital produced high returns for Genesis and easily paid Earn users their yield, which was very attractive at a time when the Federal Reserve’s benchmark rate was at virtually zero. Other riskier (and now defunct) crypto platforms like Celsius and Voyager Digital were offering yields as high as 20%.

Barry Silbert, Founder and CEO, Digital Currency Group 

David A. Grogan | CNBC

It was a booming business. Genesis had 260 employees and a robust sales desk, and Gemini was one of its largest lending partners, sending $900 million worth of customer crypto to the firm. Gemini considered Genesis, which is regulated by New York state and the Securities and Exchange Commission, to be the most reliable name in crypto lending, according to a person with direct knowledge of the matter. Diversification was a challenge, because other players had looser risk standards, said the source, who asked not to be named for confidentiality.

Friends turned foes

In 2022, the crypto market cratered, and the Earn model fell apart.

Cryptocurrencies turned south, borrowers stopped repaying their debts, hedge funds and lenders went under, and activity screeched to a halt.

The floodgates opened even wider in November, when FTX spiraled into bankruptcy and customers of the crypto exchange were unable to access billions of dollars in deposits. FTX founder Sam Bankman-Fried was soon arrested on fraud charges, accused of using client funds for trading, lending, venture investments and his lavish lifestyle in the Bahamas.

An industrywide crunch ensued as crypto investors across the board tried to withdraw their assets. Five days after FTX collapsed, Genesis was forced to freeze new lending and suspend redemptions. In a tweet the company said “FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity.”

The contagion was so rapid that both Gemini and Genesis hired experts to guide them through a potential Genesis bankruptcy.

All withdrawals on Earn have been paused since November. Gemini’s 340,000 retail clients are angry, and some have come together in class actions against Genesis and Gemini. Winklevoss places the blame on Silbert’s shoulders, and he’s gone public with his battle to retrieve the $900 million of deposits his clients placed with Genesis.

In a letter to Silbert on Jan. 2, Winklevoss said those funds belong to customers including a school teacher, a police officer and “a single mom who lent her son’s education money to you.”

Winklevoss said Gemini had been trying for six weeks to engage in a “good faith” manner with Silbert only to be met with “bad faith stall tactics.” Gemini attorneys had attempted to work with Genesis’ team through the Thanksgiving holiday, but found their efforts effectively rebuffed, a source said.

Another person who asked not to be named told CNBC that advisors for Genesis, DCG, and Gemini’s creditor committee had met multiple times throughout the six-week period that Winklevoss referenced.

Gemini creditors are represented by lawyers from both Kirkland & Ellis and Proskauer Rose, and financial advisors at Houlihan Lokey.

Advisors for DCG and Genesis include the law firm Cleary Gottlieb Steen & Hamilton and investment bank Moelis and Company.

The most recent meeting between the three sets of lawyers and bankers was Monday, according to that individual.

On Tuesday, Winklevoss followed up with an open letter to DCG’s board, asking that it replace Silbert.

One of Winklevoss’ central complaints stems from a loan that Silbert made to Genesis after the demise of crypto hedge fund Three Arrows Capital (3AC) last year. Genesis was owed over $1 billion by 3AC when the firm defaulted on its debt. Silbert stepped in and effectively backstopped his trading firm’s exposure with a $1.1 billion intercompany loan to Genesis.

At the time, Genesis sought to reassure Gemini that the DCG unit remained solvent and strong and was supported by its parent company. Silbert justified the decision in a message to investors this week, writing that “Genesis had unrivaled expertise and the best institutional client base in the world.” Court filings show that on July 6, Genesis assured Gemini that liquidity was not a concern, and the two parties agreed to keep working together.

'Crypto winter is here,' says Winklevoss twins

Gemini claims that Genesis provided misleading information regarding Silbert’s loan. Rather than serving to bolster Genesis’ operating position, the loan was a “10-year promissory note” and was a “complete gimmick that did nothing to improve Genesis’ immediate liquidity position or make its balance sheet solvent,” Winklevoss wrote.

Silbert has avoided responding directly to Winklevoss’ latest accusation, though the company has taken up his defense. In a tweet on Tuesday, DCG called the letter “another desperate and unconstructive publicity stunt,” adding that, “we are preserving all legal remedies in response to these malicious, fake, and defamatory attacks.”

“DCG will continue to engage in productive dialogue with Genesis and its creditors with the goal of arriving at a solution that works for all parties,” the company said.

A DCG spokesperson told CNBC the company denies Winklevoss’ allegations of financial impropriety.

For the 41-year-old Winklevoss twins, a public and high-profile spat is nothing new. They’re best known for their role in the birth of Facebook, now known as Meta, which was founded by Harvard classmate Mark Zuckerberg. They sued Zuckerberg, eventually settling in 2011 for a $65 million payout in cash and Facebook stock.

The brothers quickly pivoted to crypto and by 2013 said they controlled 1% of all bitcoin in circulation. The stake soared from $11 million at that time to over $4.5 billion when bitcoin peaked in 2021.

Silbert, 46, got into the market at around the same time. He sold his prior company, SecondMarket, to Nasdaq in 2015, and started DCG that year. But he first invested in bitcoin in 2012.

Silbert and the Winklevoss brothers were bitcoin bulls long before any exchanges or trading apps had made it simple to buy digital currencies and well ahead of institutional interest in the space. Now that the trade has reversed, they’re deep in the struggle.

Facing increasing pressure from creditors and the looming threat of bankruptcy, Genesis recently cut headcount by 30% in a second round of layoffs. Gemini slashed 10% of its staff in June 2022, with another round of layoffs seven weeks later.

Winklevoss says Gemini’s thousands of customers are “looking for answers.” On Tuesday, Gemini told Earn clients that it’s terminating customer loan agreements with Genesis and ending the program.

Gemini and Genesis insist that they’re negotiating in good faith. But the harsh reality is that, with the popping of the crypto bubble last year, both companies were left with no place to hide. Their clients are now scrambling to be made whole.

— CNBC’s Kate Rooney contributed to this report.

Coinbase to cut jobs by 20%, and Cameron Winklevoss pens new letter to DCG board: CNBC Crypto World

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Meta goes to arbitrator to prevent whistleblower from promoting tell-all book

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Meta goes to arbitrator to prevent whistleblower from promoting tell-all book

This photo illustration created Jan. 7, 2025, shows an image of Mark Zuckerberg, CEO of Meta, and an image of the Meta logo.

Drew Angerer | Afp | Getty Images

Meta is seeking to stop the promotion of a new memoir by a former staffer that paints the social media company in an unflattering light, including allegations of sexual harassment by the company’s policy chief. 

An emergency arbitrator ruled Thursday that Sarah Wynn-Williams is prohibited from promoting “Careless People,” her book that was released Tuesday by Flatiron Books, an imprint of publisher Macmillan Books.

The memoir chronicles Wynn-Williams’ tenure at Facebook from 2011 through 2017. During that time, she became a high-level employee who interacted with CEO Mark Zuckerberg, then-COO Sheryl Sandberg and Joel Kaplan, the company’s current policy chief. In the book, Wynn-Williams alleges that Kaplan made a number of inappropriate comments to her, which she then reported to the company as sexual harassment.

“This is a mix of out-of-date and previously reported claims about the company and false accusations about our executives,” a Meta spokesperson previously said about both her book and complaint.

Wynn-Williams also details in her book the company’s various attempts to enter the Chinese market, including building tools that would censor content to appease the Chinese Communist Party. Wynn-Williams addressed some of these China-specific claims in a whistleblower complaint that she filed in April with the Securities and Exchange Commission, NBC News reported.

The emergency arbitrator ruled in favor of Meta after watching a podcast appearance of Wynn-Williams in which she discussed her memoir and her allegations that Meta was attempting to “shut this book down.”

“The Emergency Arbitrator finds that, after reviewing the briefs and hearing oral argument, (Meta) has established a likelihood of success on the merits of its contractual non-disparagement claim against Respondent Wynn-Williams, and that immediate and irreparable loss will result in the absence of emergency relief,” the filing said.

Additionally, the arbitrator ruled that so much as Wynn-Williams can control, she is prohibited from further publishing or distributing the book and from further disparaging Meta and its officers or repeating previous disparaging remarks. The arbitrator also ruled that Wynn-Williams is to retract her previous disparaging remarks.

The company has previously dismissed Wynn-Williams’ claims as “out-of-date” and said that she was fired for “poor performance and toxic behavior.”

Meta spokesperson Andy Stone shared the emergency arbitrator’s ruling in a post on Threads, saying that it “affirms that Sarah Wynn Williams’ false and defamatory book should never have been published.”

“This urgent legal action was made necessary by Williams, who more than eight years after being terminated by the company, deliberately concealed the existence of her book project and avoided the industry’s standard fact-checking process in order to rush it to shelves after waiting for eight years,” Stone said.

Meta alleged that Wynn-Williams violated the non-disparagement terms of her September 2017 severance agreement, resulting in the company filing an emergency motion on Friday. The emergency arbitrator then conducted a telephone hearing involving legal representatives of Meta and Macmillan Books, but not Wynn-Williams who did not appear though she was given notice, the filing said.

Wynn-Williams, Flatiron Books and Macmillan Books did not respond to requests for comment.

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Intel appoints Lip-Bu Tan as new CEO, stock jumps 12%

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Intel appoints Lip-Bu Tan as new CEO, stock jumps 12%

Lip-Bu Tan appointed chief executive officer of Intel Corporation

Courtesy: Intel

Intel said on Wednesday that it had appointed Lip-Bu Tan as its new CEO, as the chipmaker attempts to recover from a tumultuous four-year run under Pat Gelsinger.

Tan was previously CEO of Cadence Design Systems, which makes software used by all the major chip designers, including Intel. He was an Intel board member but departed last year, citing other commitments.

Tan replaces interim co-CEOs David Zinsner and MJ Holthaus, who took over in December when former Intel CEO Patrick Gelsinger was ousted. Tan is also rejoining Intel’s board.

The appointment closes a chaotic chapter in Intel’s history, as investors pressured the semiconductor company to cut costs and spin off businesses due to declining sales and an inability to crack the booming artificial intelligence market.

Intel shares rose over 12% in extended trading on Wednesday.

Tan becomes the fourth permanent CEO at Intel in seven years. Following Brian Krzanich’s resignation in 2018, after the revelations of an inappropriate relationship with an employee, Bob Swan took the helm in Jan. 2019. He departed two years later after Intel suffered numerous blows from competitors and chip delays. Swan was succeeded by Gelsinger in 2021.

Gelsinger took over with a bold plan to transform Intel’s business to manufacture chips for other companies in addition to its own, becoming a foundry. But Intel’s overall products revenue continued to decline, and investors fretted over the significant capital expenditures needed for such massive chip production, including constructing a $20 billion dollar factory complex in Ohio.

Last fall, after a disappointing earnings report, Intel appeared to be for sale, and reportedly drew interest from rival companies including Qualcomm. Analysts assessed the possibility of Intel spinning off its foundry division or selling its products division — including server and PC chips — to a rival.

In AI, Intel has gotten trounced by Nvidia, whose graphics processing units (GPUs) have become the chip of choice for developers over the past few years.

In January, Intel issued a weak forecast even as it beat on earnings and revenue. The company pointed to seasonality, economic conditions and competition, and said clients are digesting inventory. The prospect of tariffs was adding to the uncertainty, Zinsner said.

Intel said that Zinsner will return to his previous role of CFO. Holthaus will remain in charge of Intel Products.

Intel was removed from the Dow Jones Industrial Average in November and was replaced by Nvidia, reflecting the dramatic change of fortune in the semiconductor industry. Intel shares lost 60% of their value last year, while Nvidia’s stock price soared 171%. At Wednesday’s close, Intel’s market cap was $89.5 billion, less than one-thirtieth of Nvidia’s valuation.

WATCH: Intel appoints Lip-Bu Tan as CEO

Intel appoints Lip-Bu Tan as CEO

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Shares of iRobot tank 30% after Roomba maker raises doubt about its survival

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Shares of iRobot tank 30% after Roomba maker raises doubt about its survival

Roomba vacuums by iRobot are displayed at Best Buy store on January 19, 2024 in San Rafael, California. 

Justin Sullivan | Getty Images

Shares of iRobot plunged more than 30% on Wednesday after it said there is “substantial doubt” about its ability to stay in business.

The Roomba maker’s financial outlook has darkened since Amazon abandoned its planned $1.7 billion acquisition of the company in January 2024, citing regulatory scrutiny. Since then, iRobot has struggled to generate cash and pay off debts.

Massachusetts-based iRobot has been restructuring since the Amazon deal plunged into uncertainty. The company has laid off 51% of its workforce since the end of 2023, and iRobot has looked to reignite revenue growth by overhauling its product lineup. The company on Tuesday launched eight new Roombas in the hopes of “better positioning iRobot as the leader in the category that we created,” CEO Gary Cohen said in a statement.

“There can be no assurance that the new product launches will be successful,” iRobot said in its Wednesday earnings statement, citing limited consumer demand, tariff uncertainty and heightened competition.

“Given these uncertainties and the implication they may have on the company’s financials, there is substantial doubt about the company’s ability to continue as a going concern for a period of at least 12 months,” iRobot said in its earnings report.

The company’s fourth-quarter revenue sagged 44% year over year to $172 million, missing estimates of $180.8 million, according to FactSet. The Roomba maker posted a net loss of $77.1 million, or $2.52 per share. Excluding a one-time “manufacturing transition charge,” iRobot had a loss of $2.06 a share, exceeding the $1.73 per share projected by analysts surveyed by FactSet.

In July 2023, iRobot took a $200 million loan from the Carlyle Group to fund the company’s operations as a stopgap until the Amazon deal closed. The company amended the loan for a temporary waiver on certain financial obligations, which requires iRobot to pay a fee of $3.6 million.

As part of Wednesday’s report, iRobot said its board has initiated a strategic review of the business and is considering alternatives that could include refinancing its debt and exploring a potential sale. The board hasn’t set a deadline for when its review will conclude, the company said.

Shortly after the Amazon deal fell apart, Amazon CEO Andy Jassy criticized regulators’ approach to its iRobot acquisition. European Union regulators threatened to block the deal, and the Federal Trade Commission in the U.S. was reportedly expected to challenge the acquisition in court.

The proposed merger, which was announced in late 2022, would have allowed iRobot to scale and better compete with its rivals, Jassy said. Several of the fastest-growing robotic vacuum businesses are based in China, such as Anker, Ecovacs and Roborock, all of which have eaten into iRobot’s share of the market.

“We abdicate the acquisition, iRobot lays off a third of its staff, the stock price completely tanks, and now, there’s a real question of whether they’re going to be a going concern,” Jassy told CNBC’s Andrew Ross Sorkin in an interview last April.

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