More drama engulfs crypto

An escalating clash between crypto titans has cast a pall over a dead calm, deer-in-headlights marketplace where the tension is high and trading volume scant. And yet there's also a strange, unmistakable whiff of optimism in the air – if only because this newest calendar year is but an infant.

"With 2023 now here, some market players have stuck their neck out with price calls for what could be another volatile year," CNBC said.

Boisterous bulls, like Tim Draper, are already looking toward the looming 2024 halving event that shrinks Bitcoin supply and, in theory, can stir buying.

Selling by debt-laden coin miners, meanwhile, has seemingly neared the stage of exhaustion, indicating a bottoming period that perhaps has reached its nadir, alleviating selling pressure going forward, explained Luno exchange's VP Vijay Ayyar.

Fueling tension on Monday was a stunningly bombastic Twitter fight between Gemini co-founder Cameron Winklevoss and Digital Currency Group CEO Barry Silbert. Winklevoss accused Silbert of engaging in “bad faith stall tactics” over Gemini's plans to resume withdrawals from Genesis, which had collaborated with Gemini on an ill-fated customer lending program that was halted in November amidst FTX-related market chaos.

As of 8:09 a.m. (EST), BTC was unmoved over 24 hours, resting at $16,712.12, according to CoinGecko.

Right then, and rather eerily, we saw Ethereum was $1,216, +0.0% over one hour and -0.0% over 24 hours.

Solana kept its hot streak alive; SOL gained 7% to reach $11.87. The 18th-largest crypto is +20% since the start of the year.

Tether, largest of the dollar-pegged stablecoins, dipped below $1 earlier this morning. It was a tiny slip. And lasted moments. So we won't call it a de-pegging.

When we checked, just before 8 a.m. (EST), USDT was trading at $0.9998. This very slight downward drift reflects a not entirely unusual trend, one that stretches back to the last week of December. We can recall $0.9996 USDT being on the table over the holidays. Routine fluctuations seemed more in play as opposed to some worrisome spiral triggering.

At 9:30 a.m. (EST), USDT was back at $0.9999. A few minutes later it was $1.00.

Cameron Winklevoss, co-founder, along with his twin brother Tyler, of Gemini, insists that Genesis owes Gemini and its clients $900 million that was lent to Genesis' digital asset prime brokerage arm in connection with Gemini's “Earn” program for several hundred thousand customers now left in the lurch. Across the crypto space, investors are bracing for more shockwaves.

In an open letter circulated on social media on Monday, Winklevoss wrote to Silbert: "For the past six weeks, we have done everything we can to engage with you in a good faith and collaborative manner in order to reach a consensual resolution for you to pay back the $900 million that you owe. However, it is now becoming clear that you have been engaging in bad faith stall tactics."

So, the first big crypto story of 2023 has arrived; and it is an online spat over money owed between the firms of influential billionaires – not a good look, as Barron's pointed out, noting that “it’s no way to start the year."

The high-stakes squabble underscores the fraught and fragile state of play in the crypto industry.

Winklevoss points to Genesis’ parent, DCG, as the root of the current situation; DCG, Winklevoss claims, owes its Genesis subsidiary $1.675 billion, a chunk of which, per The Block, is essentially money the broker owes to Gemini creditors. Those Gemini customers' funds were used by DCG to "fuel greedy share buybacks" and "illiquid venture investments," Winklevoss said.

The accusations drew a response from Silbert, who pushed back on the claims, The Block said.

"DCG did not borrow $1.675 billion from Genesis," Silbert tweeted. "DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023."

Silbert added that DCG had delivered a proposal to Gemini's representatives on Thursday but never heard back from them.

Winklevoss gave Silbert until Sunday to publicly commit to solving this problem.