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Winklevoss twins secretely withdrew $280M in assets before crypto firm collapsed

142 points by fortran77 3y ago

deleted 3y ago
[deleted]
dave8088 3y ago
These guys could have bought an island and retired in luxury with all that FB money. Instead they jumped on the crypto train. I wonder if they regret this path yet?
- NickC25 3y ago
  They could have, but there's a larger issue here - they are from one of the wealthiest towns in the entire country and while yes, they could have gone off and focused on other things after the FB trial (and to be fair, they did - they won rowing medals at the 2008 Olympics), but when you're surrounded by absurd amounts of money, all of a sudden a few hundred million isn't really all that much, as crazy as it is to say. They wanted more, because they were in an environment where someone calling it a day, no matter how much they made, is just unheard of and looked down upon. Source: I too am from their hometown. I know billionaires who keep working because they feel they don't have enough. A gentleman who lived down the street from me has grossed probably close to half a billion in his career (maybe more), yet still goes to work every day. Granted, he has kids to feed, and the Winkelvii don't, but the song remains the same. People just want more, and sometimes they get used to a lavish lifestyle, and can't quit the grind because they like the lifestyle it brings....when they have the time to enjoy it.
  - teaearlgraycold 3y ago
    That’s why as a well paid IC I don’t seek or envy that kind of money. Most people in America aren’t able to live comfortably (which IMO comes when you can do any reasonable thing without worrying about the price). But once you can what good is more money?
    - Etheryte 3y ago
      I think this is a common concept that people struggle to grasp, so let me offer a perspective. Those of us who have relatives who lived during the Second World War may have heard about famine, starving, and the like. But what you might have missed is that some of the people that lived through it look at food completely differently. There's no amount of food you can have at home where it feels enough, no pantry stocked well enough, because they remember, if the times get bad, they can get real bad. It needn't make logical sense, it's what they've instinctually learned. Money can work much the same way. If you come from a place of poverty then it can often be the case that there's no amount of money you can have in the bank that feels safe enough. This is of course only one way people can internalize concepts like this, peer pressure, family expectations, etc can all lead to similar ideas.
      - wmf 3y ago
        This has nothing to do with the Winklebros who were born rich.
        Etheryte 3y ago
        It does, if you actually bother to read the full comment. A lack of something isn't the only way these emotions form, like any arguably broken emotion the sources can be numerous.
        NickC25 3y ago
        It really doesn't. You don't believe me? You might have a relative who experienced hard times, and sure, that affects you, I get it. But you've or they have probably not seen what the Winklevoss twins have, or what I have. You weren't raised in Greenwich Connecticut where you were an elite rower and your parents were Ivy League professors. Cam and Ty's parents were very well off, and their sons went to a fabulously expensive private prep school ($30k per person per year, could be a lot more actually) in a fabulously wealthy town. The "I might not have enough" mentality is flipped, and it becomes an arms race of "I have enough, but my neighbor has much more" and thus forms an inherently competitive aspect to life, and worse, to making money. You've got a few hundred million? Cool story bro, that's pauper shit, my friend's got a billion. You've got a billion? Good for you, the guy down the street has 5 billion. Where the twins (and I) are from, you don't get admiration for getting that money, you get a target on your back, and everyone wants to outdo you. THAT is the world those guys grew up in (I did too). Nobody just says "wow, I made a billion dollars, time for me to go buy a place on some remote island or on the beach and just chill out with my family and those closest to me", they say "fuck, I got a billion but this asshole in my church just made 2 billion, and I want to beat him". Nobody is content, which is stunning to me. If I ever get that kind of money, I'm buying a shack in the mountains, and a hut on the beach, putting a bit in a trust for my nephew, and donating the rest. Fuck the rat race.
  - smolder 3y ago
    You say "they like the lifestyle it brings", but that feels like a euphamism. Cannibalism is a lifestyle some might not want to give up, if they're into that. When your conspicuous consumption is on the scale of peoples' whole livelihoods just winking out of existence, it's clearly not about anything material anymore. I'd suggest rather they are addicted to the power and status, to having people fawn and grovel, 24/7. Their careers are likely the place they get to exercise power the most, so it makes sense to keep "working" well past your material needs to keep your lording-over-people addiction sated.
    - jmye 3y ago
      I mean, your consumption is on the scale of people’s whole livelihoods, as soon as you leave a developed country. Are you just addicted to having people grovel? Or is it possible that people with a different baseline and experience have a different baseline and experience? I don’t understand, especially on an SV-dominant board, this “anyone who has more than me is necessarily evil” mentality.
      - smolder 3y ago
        > I mean, your consumption is on the scale of people’s whole livelihoods. No, and particularly not my "conspicuous consumption" which is what I said. > this “anyone who has more than me is necessarily evil” mentality. That's not my mentality. I didn't say necessarily evil or even evil. I'm postulating on the motivations of people who have access to every material comfort they could ever want, but still want 1000x that because someone else has 100x that. I'm nothing like them, nor the people in my wealth range that seem to have similar motivations --splurging on status signaling, doing anything to get more. It's irrelevant that I am richer than 3rd world people.
        jmye 3y ago
        > No, and particularly not my "conspicuous consumption" which is what I said. I mean, it is. There are multitudes in rural Asia and Africa who don’t have a fraction of a fraction of what you have and would regard most of your consumption as “conspicuous”. And you may not have said the word “evil”, but your intent was quite clear. I’m suggesting that, as I said, your baseline for what someone has, and their baseline for it, are inherently different, and that ascribing motive to that doesn’t make sense. Mostly, I think that pretending your ostentatious wealth is actually totally ok to flaunt, just because it’s yours and you don’t care about the people who see it as flaunting and ostentatious, is a moral relative, just like the one you’re suggesting is so bad.
reidjs 3y ago
Words of warning for anyone choosing to dabble in the cryptocurrency space - anything that you “have” on an exchange account is owned by the owner of the exchange, not you. This is because whoever knows the private key to a crypto wallet is the owner of the funds. Usually, exchanges don’t give you access to the private key(s). And even if they did give you access, it’s still not safe because there’s nothing stopping them from moving the funds to a different account without your knowledge. I wouldn’t recommend buying crypto unless you at least have a decent understanding of public/private key crypto
- ChumpGPT 3y ago
  >I wouldn’t recommend buying crypto ftfy
- wmf 3y ago
  This isn't really correct, especially in New York which has strong consumer protection for crypto.
  - ceejayoz 3y ago
    How many exchanges place their assets and management staff within NY's reach? Good luck getting Changpeng Zhao to show up and fork over his holdings.
    - SilasX 3y ago
      Gemini, the subject of this story, for one.
      - ceejayoz 3y ago
        That's one, and it collapsed. Ask its victims how useful NY's protections have been there thus far.
        faraggi 3y ago
        Gemini didn't collapse. the title of this article is clickvair and it purposefully confuses Gemini with Genesis which isn't the winkelvii exchange.
NickC25 3y ago
I'm from the same town as these guys and have known about them since the Facebook days. Their actions here seem quite par the course, and don't surprise me in the least.
- deleted 3y ago
  [deleted]
- jondwillis 3y ago
  Go on… why?
  - NickC25 3y ago
    Fairfield County, CT is home of some of the biggest titans on Wall Street and in the PE, Hedge Fund, etc.. sectors. Some of those titans are not the most...ethical characters.
wmf 3y ago
This article is confusing. They withdrew assets from what bank? Before what collapsed?
- pests 3y ago
  I agree it's not written well. They are talking about Gemini, the crypto exchange the twins ran. They withdrew funds from Gemini before Gemini collasped.
  - wslh 3y ago
    Don't confuse Gemini (their exchange) with Genesis, the bankrupt company from DCG.
  - faraggi 3y ago
    Gemini didn't collapse, Genesis did. The article is very clickbaity.
  - proee 3y ago
    They withdrew funds from Genesis, not Gemini. AFAIK, Gemini has not collapsed.
  - thebradbain 3y ago
    Gemini did not collapse though. Genesis, a lending company that Gemini held deposits customers who opted into their “Earn” program, collapsed. Gemini the actual NYC-compliant exchange is still solvent (and afaik still compliant)
mensetmanusman 3y ago
We’re the twins driving the same car while fleeing?
- lcnPylGDnU4H9OF 3y ago
  I'm sure one would have been riding shotgun instead.
- isk517 3y ago
  If I had the power I would mandate that the only acceptable modes of transportations for twins is either motorcycle with side car or tandem bicycle.
  - verve_rat 3y ago
    Surely tandem hang-glider is also acceptable?
  - voisin 3y ago
    Individually you might not have the power but collectively we all surely do. I demand a petition!
ohthepost 3y ago
[dead]
- deleted 3y ago
  [deleted]
burkaman 3y ago
I don't trust crypto people, but I also don't trust the New York Post. Hard to draw anything from this story.
- ct0 3y ago
  If anything, crypto has shown us just how important regulation actually is.
  - swarnie 3y ago
    Crypto speed running every financial crisis of the previous century in about three years should be studied at some point. We already have laws regulating a lot of this stuff... All my Apes gone.
    - yieldcrv 3y ago
      your Apes are with someone you don't need a regulation to look around when you’re at an ATM, cover your PIN number, and double check that you’re logged out, and check your wallet’s presence over and over again, none of the many regulations helped here and there are many similarities: people learned the best practices with new technology and followed them
      - taberiand 3y ago
        Except, y'know, for the regulations that ensure the bank itself isn't pulling the rug out from under you
        yieldcrv 3y ago
        that's not what happened with their Apes
  - red-iron-pine 3y ago
    "regs are written in blood" happens every time there is a disaster or implosion. yet again, now we see why the financial markets need scrutiny.
ianbutler 3y ago
Fun fact, I used to work across from their office for Winklevoss Capital Management in manhattan circa 2016, roughly at floor parity down on 24th, so I'd see a couple Winklevi running around from time to time over there. Totally not relevant to anything here so I understand if this gets downvoted, but fun anecdote.
swarnie 3y ago
Don't you always pull out before a grift dies? That's just smart not-business. How is this news?
- biorach 3y ago
  Because grift is, in general, illegal, and this potentially provides evidence of participation in or foreknowledge of that grift. It's news all right.
tornato7 3y ago
Lots of bad information in this thread, let me help clear it up: - Gemini is based in New York and is regulated by the New York State Department of Financial Services. Gemini was granted a charter to operate a trust under the NYSDFS. - Gemini is still alive and operating, regular crypto and cash in the Gemini exchange can still be withdrawn by users. Users that were participating in Gemini's Earn program lent their money to Genesis, which went belly-up, and they are now creditors of Genesis. Users opted-in to loan their money out. Sometimes you loan money and it doesn't get paid back, that's life. The real question of Gemini's legal trouble comes down to two things: - Did Gemini make it clear to customers that money they put in Earn was lent to counterparties that may not pay them back? - Did Gemini do proper due diligence on behalf of customers, and did they continue to allow deposits into Earn even if they had reason to believe Genesis was insolvent? The reason the 280M withdrawal is news is that it may indicate they knew Genesis was insolvent before they closed the Earn program. However, the twins claim it was Earn customer money that they withdrew, in which case it may be a good thing (managing risk if they suspected Genesis insolvency). We don't know for certain whose money it was at this point, all we know is that 280M was withdrawn, everything else is speculation.
- deleted 3y ago
  [deleted]
  - deleted 3y ago
    [deleted]
ACV001 3y ago
Secretly? Did they sneak through the backdoor?
bpiche 3y ago
SEC when?
- wmf 3y ago
  https://www.sec.gov/news/press-release/2023-7 https://www.sec.gov/news/press-release/2023-7
andirk 3y ago
An update every Friday about the Gemini + Genesis + DCG legal proceedings can be followed here https://www.gemini.com/earn https://www.gemini.com/earn . TLDR: everything gets punted to the next month, although October 2023 might be when the action heats up.

142 points by fortran77 3y ago

deleted 3y ago

[deleted]

These guys could have bought an island and retired in luxury with all that FB money. Instead they jumped on the crypto train. I wonder if they regret this path yet?

NickC25 3y ago
They could have, but there's a larger issue here - they are from one of the wealthiest towns in the entire country and while yes, they could have gone off and focused on other things after the FB trial (and to be fair, they did - they won rowing medals at the 2008 Olympics), but when you're surrounded by absurd amounts of money, all of a sudden a few hundred million isn't really all that much, as crazy as it is to say. They wanted more, because they were in an environment where someone calling it a day, no matter how much they made, is just unheard of and looked down upon. Source: I too am from their hometown. I know billionaires who keep working because they feel they don't have enough. A gentleman who lived down the street from me has grossed probably close to half a billion in his career (maybe more), yet still goes to work every day. Granted, he has kids to feed, and the Winkelvii don't, but the song remains the same. People just want more, and sometimes they get used to a lavish lifestyle, and can't quit the grind because they like the lifestyle it brings....when they have the time to enjoy it.
- teaearlgraycold 3y ago
  That’s why as a well paid IC I don’t seek or envy that kind of money. Most people in America aren’t able to live comfortably (which IMO comes when you can do any reasonable thing without worrying about the price). But once you can what good is more money?
  - Etheryte 3y ago
    I think this is a common concept that people struggle to grasp, so let me offer a perspective. Those of us who have relatives who lived during the Second World War may have heard about famine, starving, and the like. But what you might have missed is that some of the people that lived through it look at food completely differently. There's no amount of food you can have at home where it feels enough, no pantry stocked well enough, because they remember, if the times get bad, they can get real bad. It needn't make logical sense, it's what they've instinctually learned. Money can work much the same way. If you come from a place of poverty then it can often be the case that there's no amount of money you can have in the bank that feels safe enough. This is of course only one way people can internalize concepts like this, peer pressure, family expectations, etc can all lead to similar ideas.
    - wmf 3y ago
      This has nothing to do with the Winklebros who were born rich.
      - Etheryte 3y ago
        It does, if you actually bother to read the full comment. A lack of something isn't the only way these emotions form, like any arguably broken emotion the sources can be numerous.
        NickC25 3y ago
        It really doesn't. You don't believe me? You might have a relative who experienced hard times, and sure, that affects you, I get it. But you've or they have probably not seen what the Winklevoss twins have, or what I have. You weren't raised in Greenwich Connecticut where you were an elite rower and your parents were Ivy League professors. Cam and Ty's parents were very well off, and their sons went to a fabulously expensive private prep school ($30k per person per year, could be a lot more actually) in a fabulously wealthy town. The "I might not have enough" mentality is flipped, and it becomes an arms race of "I have enough, but my neighbor has much more" and thus forms an inherently competitive aspect to life, and worse, to making money. You've got a few hundred million? Cool story bro, that's pauper shit, my friend's got a billion. You've got a billion? Good for you, the guy down the street has 5 billion. Where the twins (and I) are from, you don't get admiration for getting that money, you get a target on your back, and everyone wants to outdo you. THAT is the world those guys grew up in (I did too). Nobody just says "wow, I made a billion dollars, time for me to go buy a place on some remote island or on the beach and just chill out with my family and those closest to me", they say "fuck, I got a billion but this asshole in my church just made 2 billion, and I want to beat him". Nobody is content, which is stunning to me. If I ever get that kind of money, I'm buying a shack in the mountains, and a hut on the beach, putting a bit in a trust for my nephew, and donating the rest. Fuck the rat race.
- smolder 3y ago
  You say "they like the lifestyle it brings", but that feels like a euphamism. Cannibalism is a lifestyle some might not want to give up, if they're into that. When your conspicuous consumption is on the scale of peoples' whole livelihoods just winking out of existence, it's clearly not about anything material anymore. I'd suggest rather they are addicted to the power and status, to having people fawn and grovel, 24/7. Their careers are likely the place they get to exercise power the most, so it makes sense to keep "working" well past your material needs to keep your lording-over-people addiction sated.
  - jmye 3y ago
    I mean, your consumption is on the scale of people’s whole livelihoods, as soon as you leave a developed country. Are you just addicted to having people grovel? Or is it possible that people with a different baseline and experience have a different baseline and experience? I don’t understand, especially on an SV-dominant board, this “anyone who has more than me is necessarily evil” mentality.
    - smolder 3y ago
      > I mean, your consumption is on the scale of people’s whole livelihoods. No, and particularly not my "conspicuous consumption" which is what I said. > this “anyone who has more than me is necessarily evil” mentality. That's not my mentality. I didn't say necessarily evil or even evil. I'm postulating on the motivations of people who have access to every material comfort they could ever want, but still want 1000x that because someone else has 100x that. I'm nothing like them, nor the people in my wealth range that seem to have similar motivations --splurging on status signaling, doing anything to get more. It's irrelevant that I am richer than 3rd world people.
      - jmye 3y ago
        > No, and particularly not my "conspicuous consumption" which is what I said. I mean, it is. There are multitudes in rural Asia and Africa who don’t have a fraction of a fraction of what you have and would regard most of your consumption as “conspicuous”. And you may not have said the word “evil”, but your intent was quite clear. I’m suggesting that, as I said, your baseline for what someone has, and their baseline for it, are inherently different, and that ascribing motive to that doesn’t make sense. Mostly, I think that pretending your ostentatious wealth is actually totally ok to flaunt, just because it’s yours and you don’t care about the people who see it as flaunting and ostentatious, is a moral relative, just like the one you’re suggesting is so bad.

reidjs 3y ago

Words of warning for anyone choosing to dabble in the cryptocurrency space - anything that you “have” on an exchange account is owned by the owner of the exchange, not you. This is because whoever knows the private key to a crypto wallet is the owner of the funds. Usually, exchanges don’t give you access to the private key(s). And even if they did give you access, it’s still not safe because there’s nothing stopping them from moving the funds to a different account without your knowledge. I wouldn’t recommend buying crypto unless you at least have a decent understanding of public/private key crypto

ChumpGPT 3y ago
>I wouldn’t recommend buying crypto ftfy
wmf 3y ago
This isn't really correct, especially in New York which has strong consumer protection for crypto.
- ceejayoz 3y ago
  How many exchanges place their assets and management staff within NY's reach? Good luck getting Changpeng Zhao to show up and fork over his holdings.
  - SilasX 3y ago
    Gemini, the subject of this story, for one.
    - ceejayoz 3y ago
      That's one, and it collapsed. Ask its victims how useful NY's protections have been there thus far.
      - faraggi 3y ago
        Gemini didn't collapse. the title of this article is clickvair and it purposefully confuses Gemini with Genesis which isn't the winkelvii exchange.

NickC25 3y ago

I'm from the same town as these guys and have known about them since the Facebook days. Their actions here seem quite par the course, and don't surprise me in the least.

deleted 3y ago
[deleted]
jondwillis 3y ago
Go on… why?
- NickC25 3y ago
  Fairfield County, CT is home of some of the biggest titans on Wall Street and in the PE, Hedge Fund, etc.. sectors. Some of those titans are not the most...ethical characters.

wmf 3y ago

This article is confusing. They withdrew assets from what bank? Before what collapsed?

pests 3y ago
I agree it's not written well. They are talking about Gemini, the crypto exchange the twins ran. They withdrew funds from Gemini before Gemini collasped.
- wslh 3y ago
  Don't confuse Gemini (their exchange) with Genesis, the bankrupt company from DCG.
- faraggi 3y ago
  Gemini didn't collapse, Genesis did. The article is very clickbaity.
- proee 3y ago
  They withdrew funds from Genesis, not Gemini. AFAIK, Gemini has not collapsed.
- thebradbain 3y ago
  Gemini did not collapse though. Genesis, a lending company that Gemini held deposits customers who opted into their “Earn” program, collapsed. Gemini the actual NYC-compliant exchange is still solvent (and afaik still compliant)

mensetmanusman 3y ago

We’re the twins driving the same car while fleeing?

lcnPylGDnU4H9OF 3y ago
I'm sure one would have been riding shotgun instead.
isk517 3y ago
If I had the power I would mandate that the only acceptable modes of transportations for twins is either motorcycle with side car or tandem bicycle.
- verve_rat 3y ago
  Surely tandem hang-glider is also acceptable?
- voisin 3y ago
  Individually you might not have the power but collectively we all surely do. I demand a petition!

ohthepost 3y ago

[dead]

deleted 3y ago
[deleted]

burkaman 3y ago

I don't trust crypto people, but I also don't trust the New York Post. Hard to draw anything from this story.

ct0 3y ago
If anything, crypto has shown us just how important regulation actually is.
- swarnie 3y ago
  Crypto speed running every financial crisis of the previous century in about three years should be studied at some point. We already have laws regulating a lot of this stuff... All my Apes gone.
  - yieldcrv 3y ago
    your Apes are with someone you don't need a regulation to look around when you’re at an ATM, cover your PIN number, and double check that you’re logged out, and check your wallet’s presence over and over again, none of the many regulations helped here and there are many similarities: people learned the best practices with new technology and followed them
    - taberiand 3y ago
      Except, y'know, for the regulations that ensure the bank itself isn't pulling the rug out from under you
      - yieldcrv 3y ago
        that's not what happened with their Apes
- red-iron-pine 3y ago
  "regs are written in blood" happens every time there is a disaster or implosion. yet again, now we see why the financial markets need scrutiny.

ianbutler 3y ago

Fun fact, I used to work across from their office for Winklevoss Capital Management in manhattan circa 2016, roughly at floor parity down on 24th, so I'd see a couple Winklevi running around from time to time over there. Totally not relevant to anything here so I understand if this gets downvoted, but fun anecdote.

swarnie 3y ago

Don't you always pull out before a grift dies? That's just smart not-business. How is this news?

biorach 3y ago
Because grift is, in general, illegal, and this potentially provides evidence of participation in or foreknowledge of that grift. It's news all right.

tornato7 3y ago

Lots of bad information in this thread, let me help clear it up: - Gemini is based in New York and is regulated by the New York State Department of Financial Services. Gemini was granted a charter to operate a trust under the NYSDFS. - Gemini is still alive and operating, regular crypto and cash in the Gemini exchange can still be withdrawn by users. Users that were participating in Gemini's Earn program lent their money to Genesis, which went belly-up, and they are now creditors of Genesis. Users opted-in to loan their money out. Sometimes you loan money and it doesn't get paid back, that's life. The real question of Gemini's legal trouble comes down to two things: - Did Gemini make it clear to customers that money they put in Earn was lent to counterparties that may not pay them back? - Did Gemini do proper due diligence on behalf of customers, and did they continue to allow deposits into Earn even if they had reason to believe Genesis was insolvent? The reason the 280M withdrawal is news is that it may indicate they knew Genesis was insolvent before they closed the Earn program. However, the twins claim it was Earn customer money that they withdrew, in which case it may be a good thing (managing risk if they suspected Genesis insolvency). We don't know for certain whose money it was at this point, all we know is that 280M was withdrawn, everything else is speculation.

deleted 3y ago
[deleted]
- deleted 3y ago
  [deleted]

ACV001 3y ago

Secretly? Did they sneak through the backdoor?

bpiche 3y ago

SEC when?

wmf 3y ago
https://www.sec.gov/news/press-release/2023-7 https://www.sec.gov/news/press-release/2023-7

andirk 3y ago

An update every Friday about the Gemini + Genesis + DCG legal proceedings can be followed here https://www.gemini.com/earn https://www.gemini.com/earn . TLDR: everything gets punted to the next month, although October 2023 might be when the action heats up.