Most recently, under-fire Digital Currency Group founder Barry Silbert has apparently deleted a raft of his old tweets.

According to his X (formerly Twitter) account, Silbert signed up in October 2011. However, at the time of writing, his timeline shows no tweets or replies older than January 5 this year.

Among the messages saved by one of his die-hard fans was Silbert branding himself a “complete and total professional failure,” and one in which he advises Dogecoin holders to convert it to bitcoin.

It's not clear what prompted Silbert's social media cull but he's currently taking social media flak after nearly $580 million in outflows from Grayscale’s Bitcoin Trust (GBTC) was blamed for a dip in bitcoin's price. GBTC converted into an ETF in early January 2024.

Barry Silbert worked on some of the highest-profile corporate failures. Now, as founder of venture capital firm Digital Currency Group, parent of troubled crypto firm Genesis, he is grappling with problems closer to home. He has been accused of fraud by his ex-business partner turned rival, Cameron Winklevoss. The stunning allegations follow Forbes' estimates last month that Silbert’s fortune had evaporated, and as government investigations into Silbert's companies ramp up.

Early Life

Barry Silbert was born on August 18, 1976, in United States and grew up in Maryland. From an early age, he showed a keen interest in entrepreneurship and finance. After completing his education, Silbert began carving his path in the world of business.

DCG

In the late 1990s, during the dot-com boom, Silbert started his first company, and it became clear that he had a knack for technology and innovation. However, it was his encounter with Bitcoin and blockchain technology that would shape his career and leave a lasting impact on the industry. It was in 2012 when Barry Silbert discovered Bitcoin. He told Reuters in the 2017 interview that he bought about $175,000 worth of the cryptocurrency in 2012, paying about $11 a coin at a time when bitcoin was little known beyond niche internet blogs. Seeing the potential of this groundbreaking technology, he founded the Digital Currency Group (DCG) to invest in and support the nascent cryptocurrency ecosystem.

DCG quickly became one of the most influential investment firms in the crypto space, backing numerous successful blockchain startups. As crypto markets soared in value, DCG raised money from the venture capital arm of Bain Capital, MasterCard, New York Life Insurance Company, and Canadian bank CIBC. Silbert's leadership and strategic vision played a pivotal role in the growth and adoption of cryptocurrencies.

But Silbert didn't stop there. He also founded Grayscale Investments, a subsidiary of DCG, which became the world's largest digital currency asset manager. Through Grayscale, Silbert provided investors with access to digital assets through products such as the Grayscale Bitcoin Trust. Other formidable portfolio of companies including Genesis Exchange, Foundry Mine and the now sold Coindesk Media.

Beyond his business ventures, Barry Silbert is a strong believer in the power of community and collaboration. He co-founded the Crypto Council for Innovation to advocate for sound cryptocurrency policies and foster responsible innovation. Silbert's current worth is unclear but Forbes pegged it in 2022 at $3.2 billion.

However, his journey in the crypto world has never been smooth-sailing, especially now.

Twitter Feud & Open Letter

In January 2023, Barry Silbert, found himself in the midst of a dispute over frozen funds. It all started when Cameron Winklevoss, co-founder of Gemini, took to Twitter and publicly claimed that Digital Currency Group borrowed a staggering amount of $1.6 billion from Genesis Global Capital.

Silbert, on the other hand, vehemently rejected these claims. He responded swiftly on Twitter, denying any borrowing of such a monumental sum from Genesis Global Capital. This clash of statements has set the stage for a heated debate within the cryptocurrency community. Unfazed by Silbert's denial, Cameron Winklevoss fired back with an open letter addressed to Barry Silbert. In this letter, shared on Twitter on 2nd January, Winklevoss boldly asserts that Gemini users are owed a staggering amount of $900 million by Genesis Global Capital.

• Winklevoss stated he was writing on behalf of 340,000 users who “entrusted more than $900 million of their assets to you.” He said Silbert ignored proposals made on December 17 and 25 2022 to resolve the issue, calling the behavior “bad faith stall tactics.”

• Silbert then responded to Winklevoss on Twitter, stating “DCG did not borrow $1.675 billion from Genesis” and claimed DCG has made all interest payments due to Genesis. Silbert said DCG had also delivered a resolution proposal to Genesis and Gemini on December 29th and had no response.

• In a letter to shareholders in November 2023, DCG said it took out a US$575 million loan from its Genesis subsidiary and owes it a US$1.1 billion promissory note to cover a liquidity crunch due to exposure to the collapse of the Three Arrows Capital hedge fund earlier in the year.
  
• DCG’s Genesis crypto lending platform paused withdrawals of assets on November 16, citing “abnormal withdrawal requests” while revealing that it had US$175 million locked in the collapsed FTX exchange, which froze accounts and filed for bankruptcy on Nov. 11, 2022.
  
• In turn, the Winklevoss-owned Gemini exchange halted withdrawals on its interest-bearing Earn program as the program used Genesis as a trading partner.
  
• On Dec. 27, 2022, Gemini was sued by investors, alleging fraud and violations of securities laws.

Statement from DCG

Writing in a letter to investors, Silbert said that "this past year has been the most difficult of my life – both personally and professionally. Bad actors and repeated blow-ups have wreaked havoc on our industry, with ripple effects extending far and wide."

He noted DCG has cut jobs and is winding down its crypto asset manager HQ.

In a Q&A section, Silbert waded into the controversy around Genesis and its customer Gemini. Genesis' lending arm halted withdrawals in November, which locked up funds belonging to investors in Gemini's Earn product, leaving Gemini scrambling to figure out how to get money back to its customers.

Gemini raised the temperature in the fight, calling for Silbert to step down as CEO of DCG and officially canceling the Gemini Earn program, and they have also raised questions about the movement of money between Genesis and DCG.

Alleged Accusations

Silbert said DCG has borrowed from Genesis Capital, but "these loans were always structured on an arm's length basis and were priced at prevailing market interest rates." Silbert said DCG has a $1.1 billion promissory note maturing in 2032 with Genesis Capital, which arose from DCG assuming its subsidiary's bankruptcy claim against crypto hedge fund Three Arrows Capital. DCG, according to the letter, also owes the subsidiary $447.5 million (of actual U.S. dollars, not crypto) borrowed between January and May 2022 at interest rates of 10% to 12%, plus 4,550 bitcoin (BTC), worth about $78 million.

As for DCG's role in Genesis Capital attempting to restructure, Silbert said: "Because of the outstanding loans and the promissory note that DCG owes to Genesis Capital, DCG executives, including those on the Genesis board, have no decision-making authority related to any restructuring of Genesis Capital."

Grayscale

Manager of more than a dozen crypto funds, including the massive Grayscale Bitcoin Trust (GBTC), Grayscale accounts for nearly two-thirds of DCG’s revenue, according to a recent investor letter seen by Forbes. Of the $188 million of revenue reported by DCG in the third quarter, Grayscale brought in 67% or $126 million—2.5 times more than the next-biggest subsidiary, Foundry.

Making matters worse, Grayscale's value to a future buyer may be diminished by the likely approval of exchange-traded funds based on the bitcoin spot price. Ironically, Grayscale has fought to change GBTC to an investor-friendly ETF format, and it recently won an important court battle that furthers its case, but the result is likely to be a raft of new competitors, including giants like BlackRock and Fidelity, offering similar funds with management fees that are a fraction of the current level.

Losing Grayscale would leave a reduced DCG mired in endless settlements and lawsuits, the remnants of Silbert’s empire would effectively become an insolvent zombie company.

Apart from that, New York Attorney General Letitia James seeks to ban DCG and Genesis from doing business in her state as a punishment for allegedly defrauding investors by trying to conceal more than $1.1 billion in losses linked to the collapse of Singapore-based Three Arrows Capital. The crypto hedge fund had been one of the largest Genesis borrowers. Silbert and DCG insist that they had cooperated with the New York Attorney General’s investigation, were “blindsided” by the allegations, which they call “baseless,” and characterize Genesis’ accusations as “misleading.”

Step down

Fast forward to today, Grayscale informed the U.S. Securities and Exchange Commission (SEC) that Silbert and DCG president Mark Murphy had resigned their seats on Grayscale’s board of directors. As of January 1, Silbert’s role as Grayscale chairman will be filled by Mark Shifke, a financial services veteran who currently serves as DCG's chief financial officer.

Silbert has so far said nothing publicly regarding the motives behind his decision to resign, including whether he jumped or was pushed out the window.