Barry Silbert, chief executive of Digital Currency Group, on Tuesday shared more details on the crypto conglomerate’s borrowing from subsidiary Genesis Global Capital.
In a shareholder letter, Mr. Silbert said DCG currently owes Genesis $447.5 million in U.S. dollars and 4,550 bitcoins worth about $78 million, due in May.
DCG also has a $1.1 billion promissory note due to Genesis in 2032. The note stems from DCG taking on Genesis’s liabilities resulting from defaults on $2.4 billion in loans the subsidiary made to crypto hedge fund Three Arrow Capital.
Mr. Silbert first revealed the intercompany loans in a November investor letter after crypto exchange FTX collapsed.
Mr. Silbert said the note is “not callable and does not contain any other similar features of a callable bond,” adding that any recovery from Three Arrows will go directly to paying down the promissory note.
Some investors had speculated that the $1.1 billion note is structured as a callable bond, which would allow Genesis creditors to demand immediate repayment of the $1.1 billion in the event of a Genesis bankruptcy.
Mr. Silbert’s latest shareholder letter came after Cameron Winklevoss, co-founder of crypto exchange Gemini, demanded his immediate removal as chief executive of DCG in an open letter posted on Twitter.
Mr. Winklevoss accused Mr. Silbert, DCG and Genesis of defrauding users of Gemini’s $900 million earn program, which allowed participants to lend out their cryptocurrencies in exchange for high interest rates. Gemini lent the $900 million to Genesis to produce a return. It paused withdrawals from the earn program after Genesis halted redemptions on Nov.16.
“This is another desperate and unconstructive publicity stunt from Cameron Winklevoss to deflect blame from himself and Gemini, who are solely responsible for operating Gemini Earn and marketing the program to its customers,” A DCG spokeswoman said of Mr. Winklevoss’s letter.