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How the Winklevii's (Winklevoss twins) Second Act Went Bad
New York Mag link: https://nymag.com/intelligencer/2023/12/how-the-winkleviis-second-act-in-bitcoin-went-bad.html
Archive, No paywall: https://archive.ph/O5GlE
In early June 2019, Cameron and Tyler Winklevoss invited the author Ben Mezrich to a private get-together at the Park Avenue South headquarters of their crypto exchange, Gemini, an office where the money and ambition of the digital currency world were on outlandish display: A giant chrome statue reminiscent of the MTV Moon Man trophy hung from the ceiling; employees were called “astronauts”; the C-suite was referred to as “mission control.” Mezrich, of course, was a key figure in the Winklevosses’ lives. As the author of The Accidental Billionaires: The Founding of Facebook, a Tale of Sex, Money, Genius, and Betrayal — the 2009 book that became The Social Network — he had helped define them, before their 30th birthdays, as spoiled Ivy League monozygotic brats who got rich thanks to their dad’s lawyer. “The Winklevii aren’t suing me for intellectual property theft,” Jesse Eisenberg, playing the Mark Zuckerberg character, says in one of the movie’s key lines. “They are suing me because, for the first time in their lives, things didn’t go exactly the way they were supposed to for them.”
Yet, ten years later, Mezrich was hawking his new book, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption, casting the twins as heroes — to their own employees. “That was a weird day,” one onlooker said. Attendance was optional, but the midday event did have pizza, and who doesn’t love pizza, so dozens showed up. The twins seemed relaxed, far from their normally stiff selves, two others said. “I remember them asking what Ben’s process was, and him saying, ’I write books I can turn into movies,’” a fourth attendee said. What was so strange about the whole thing is that Mezrich’s book hardly even mentions Gemini. Then, after it was all over, the twins asked their employees to grab a free copy and form a line, so all three of them — the author and his dual protagonists — could all sign the book.
The Winklevoss twins have, for the better part of a decade, been trying to convince the world they made a comeback. For anyone who stopped paying attention to them after the Facebook movie came out, here’s the general trajectory: The $65 million settlement from Zuckerberg over their claims to the Facebook idea turned into a major bet on bitcoin, back when the digital currency traded for about $8. (Lately it trades around $38,000.) Gemini, which they started in 2014, was supposed to be their legacy — a highly profitable business that would not only cement their status as serious players in the growing crypto industry. If everything went right, it had the potential to be a $100 billion company of their own. In an often sketchy or even scammy sector plagued by hacks and FBI raids, they branded themselves as rule followers using financial best practices to create a dependable “next generation” exchange that wealthy investors and institutions could rely on as they got involved in crypto investing. They would be the kind of entrepreneurs who would work with government regulators even as much of the rest of the industry tried to avoid oversight. “In the beginning of Gemini’s history, we were very focused on asking permission, and not asking for forgiveness,” a former executive said. “We always acted on the expectation of how regulators would want us to work.”
Gemini is, of course, a reference to twins, as well as a NASA space flight — but any astrologer could tell you that geminis have a tendency for saying one thing and doing another. Last month, New York Attorney General Letitia James sued the Winklevosses’ exchange, claiming that it defrauded 290,000 people out of $1.1 billion worth of crypto. The suit presented a company that was not only willing to overlook its own internal concerns about a partner firm that was holding a huge chunk of its customers’ deposits but to continue representing to those customers that their money was secure even as the board was privately comparing this partner to Lehman Brothers in 2008. Interviews with nine sources, together with court records, reveal a company that began taking larger and larger risks as it attempted to keep up with competitors like FTX and Binance, both of which later ran spectacularly afoul of law. (None of the sources are being named since they continue to work in the industry and fear getting sued for talking about the companies.) That frantic chase is said to have led Gemini to stray from the rule-following conservatism that was the original cornerstone of the brand. Now that they’ve been accused of lying to their customers — and their exchange has fallen out of the top 100 by global trading volume — the twins are facing the most consequential test to their credibility yet.
- more at link -
Yet, ten years later, Mezrich was hawking his new book, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption, casting the twins as heroes — to their own employees. “That was a weird day,” one onlooker said. Attendance was optional, but the midday event did have pizza, and who doesn’t love pizza, so dozens showed up. The twins seemed relaxed, far from their normally stiff selves, two others said. “I remember them asking what Ben’s process was, and him saying, ’I write books I can turn into movies,’” a fourth attendee said. What was so strange about the whole thing is that Mezrich’s book hardly even mentions Gemini. Then, after it was all over, the twins asked their employees to grab a free copy and form a line, so all three of them — the author and his dual protagonists — could all sign the book.
The Winklevoss twins have, for the better part of a decade, been trying to convince the world they made a comeback. For anyone who stopped paying attention to them after the Facebook movie came out, here’s the general trajectory: The $65 million settlement from Zuckerberg over their claims to the Facebook idea turned into a major bet on bitcoin, back when the digital currency traded for about $8. (Lately it trades around $38,000.) Gemini, which they started in 2014, was supposed to be their legacy — a highly profitable business that would not only cement their status as serious players in the growing crypto industry. If everything went right, it had the potential to be a $100 billion company of their own. In an often sketchy or even scammy sector plagued by hacks and FBI raids, they branded themselves as rule followers using financial best practices to create a dependable “next generation” exchange that wealthy investors and institutions could rely on as they got involved in crypto investing. They would be the kind of entrepreneurs who would work with government regulators even as much of the rest of the industry tried to avoid oversight. “In the beginning of Gemini’s history, we were very focused on asking permission, and not asking for forgiveness,” a former executive said. “We always acted on the expectation of how regulators would want us to work.”
Gemini is, of course, a reference to twins, as well as a NASA space flight — but any astrologer could tell you that geminis have a tendency for saying one thing and doing another. Last month, New York Attorney General Letitia James sued the Winklevosses’ exchange, claiming that it defrauded 290,000 people out of $1.1 billion worth of crypto. The suit presented a company that was not only willing to overlook its own internal concerns about a partner firm that was holding a huge chunk of its customers’ deposits but to continue representing to those customers that their money was secure even as the board was privately comparing this partner to Lehman Brothers in 2008. Interviews with nine sources, together with court records, reveal a company that began taking larger and larger risks as it attempted to keep up with competitors like FTX and Binance, both of which later ran spectacularly afoul of law. (None of the sources are being named since they continue to work in the industry and fear getting sued for talking about the companies.) That frantic chase is said to have led Gemini to stray from the rule-following conservatism that was the original cornerstone of the brand. Now that they’ve been accused of lying to their customers — and their exchange has fallen out of the top 100 by global trading volume — the twins are facing the most consequential test to their credibility yet.
Whew! Bit of a long read here, but somewhat interesting.
Don't miss the video of their rock band (it's really them) and updates on their other hobbies.
This maybe doesn't belong in the General Discussion forum but I couldn't figure out which forum to post it in. Do we have a Millenials forum on DU?
