Would a Clear Out of Crypto Moguls and Their Centralized Companies Be Good for the Digital Asset Class?

cryptonews.com:

As more and more crypto companies face scrutiny – and some throw in the towel after a rough bear market - questions are being raised whether that could be a good thing for crypto after all.

Latest among the crypto entrepreneurs that are facing scrutiny now are Cameron and Taylor Winklevoss, the twins who founded Gemini exchange. The twins have been in the spotlight recently as a feud between them and fellow crypto entrepreneur Barry Silbert has unfolded over Gemini’s interest-paying “Earn” program.

The partner Gemini worked with for its Earn program was Genesis Global Capital, a subsidiary of Silbert’s Digital Currency Group (DCG). But when Genesis in November last year halted redemptions for its clients, Gemini’s clients also became unable to withdraw funds held on Gemini Earn.

According to a Bloomberg article from Tuesday, the twins – who earlier in January wrote an open letter to DCG’s board where they called for the board to sack Barry Silbert as the company’s CEO – are as much to blame for the situation as Silbert.

Per the article, Gemini employees had expressed concern about the exchange’s dependence on Silbert’s companues since 2021, but they were unable to find any other companies to work with. It added that Gemini had “plowed ahead” with Genesis as its partner even as other crypto lenders collapsed, and Silbert’s exposure to the insolvent crypto hedge fund Three Arrows Capital was made public.

At the same time, both Gemini and DCG subsidiary Genesis Global Capital have been charged with securities laws violations by the Securities and Exchange Commission (SEC), making the situation even more dire for both of them.

“The [SEC] today charged Genesis Global Capital, LLC and Gemini Trust Company, LLC for the unregistered