The Winklevoss twins, meanwhile, have seen their worth fall from around $4bn each to just over $1bn apiece. The pair are rumoured to have paid $11m for 1pc of the world’s supply of Bitcoin in 2013.
Silbert, 46, founder of cryptocurrency investment conglomerate Digital Currency Group (DCG), which owns Genesis, is thought to have seen his net worth cut amid the crisis at the company. His empire includes Genesis, the cryptocurrency lender, crypto media company Coindesk, and publicly listed Bitcoin investment fund Grayscale. Last year, it was valued at more than $10bn, and at one stage had more than $50bn under management.
His crypto empire also includes two publicly traded funds, one of which tracks the price of Bitcoin and the other digital currency Ethereum. Both, however, are trading at a steep discount. Marcus Sotiriou, analyst at digital asset broker GlobalBlock, says: “Grayscale’s ethereum trust trades at a record 60pc low against ethereum, showing a lack of investor confidence.”
Other crypto entrepreneurs are in crisis mode. Silvergate Bank, a US-listed bank that had acted as a gateway to financial markets for many crypto companies, including FTX, on Thursday reported it had suffered $8bn in withdrawals. Its shares fell 40pc. Among its biggest shareholders are Brendan Blumer, a crypto founder reportedly worth billions.
Coinbase, meanwhile, arguably the best known consumer exchange listed in New York, agreed to cough up $100m to settle a complaint over money laundering failings. Brian Armstrong, Coinbase’s founder, has seen his net worth tumble from more than $10bn to just over $1bn, according to Bloomberg data. Coinbase has lost more than 90pc of its value since its $100bn float in 2021.
Another cryptocurrency evangelist, and now ex-billionaire, who has seen his personal wealth crumble is Michael Saylor. Known for lambasting critics of digital coins, telling them to “have fun staying poor”, Saylor’s publicly-listed company, Microstrategy, embarked on a crypto buying binge in 2021.
He personally owns more than 17,700 Bitcoin, which are now worth a quarter of a billion dollars, half what they were last year. His 23pc stake in Microstrategy has also plunged 68pc in 12 months. The company is now worth around $1.4bn. After promising his company would never sell its coins, it disposed of some 700 in December for tax purposes.
Many crypto true-believers have grown quiet. Elon Musk, who once espoused the value of Bitcoin, ordered Tesla to sell 75pc of its $1.5bn in digital currency holdings in July last year, narrowly avoiding a loss.
The dispute between Genesis and Gemini represents an industry flash point as crypto entrepreneurs go on the defensive amid the market panic.
In a public letter, Cameron Winklevoss last week said Genesis funds were borrowed by Silbert’s other companies and further alleges these were used to “fuel greedy share buybacks” and “kamikaze” trades for “personal gain”. Silbert responded that his company had “delivered… a proposal on Dec 29th and has not received any response”.
He claims Silbert has refused to sit down for talks over the Christmas period on how to resolve the cash crisis. “After six weeks your behaviour is not only completely unacceptable, it is unconscionable,” Cameron Winklevoss said.
The row has crypto insiders taking sides. David Siemer, co-founder of cryptocurrency asset manager Wave Financial, claims DCG has been “inflicting yet more reputational and actual market damage to the broader industry” already bruised by multiple disputes and scandals.
The litigious twins, who once sued Zuckerberg over claims he stole their idea for Facebook and later settled with him for $65m, issued an ultimatum to Silbert, which ends on Sunday.
It is not just Silbert under pressure. The Winklevoss twins have been sued in a class action by angry customers, who accuse them of dealing in unlicensed securities through their interest-earning product, which was linked to Genesis.
Across the cryptocurrency world, founders are pointing fingers and lawyering up. Nobody wants to become the “next FTX”.
