The Winklevoss twins, Cameron and Tyler, are known for their involvement in the founding of Facebook, which was dramatized in the film “The Social Network.” However, they have recently made headlines for a different reason – a settlement with the New York State Department of Financial Services (NYFDS). The settlement requires the twins to give back $1.1 billion to their customers who use their cryptocurrency exchange, Gemini.
In January, New York sued Gemini for funneling user funds to a high-risk cryptocurrency lending firm called Genesis Global Capital. Through a program called Gemini Earn, users were promised 8% returns if they lent their holdings to Genesis. However, the returns turned out to be much riskier as Genesis was a client of the now-defunct cryptocurrency exchange FTX. This ultimately led to a massive collapse of the system in late 2022.
The NYFDS stated in a press release that Gemini’s failure to conduct due diligence on Genesis and maintain adequate reserves caused harm to both the company and over 200,000 of its customers, including almost 30,000 New Yorkers who are still unable to access their virtual currency.
As for the twins, they are famously known for suing Facebook founder Mark Zuckerberg for cutting them out of the social network’s success. They were compensated with $20 million in Facebook stock, which is now worth over $200 million. The twins also bought 1% of bitcoins when they were trading at $10 each, making them super rich as the cryptocurrency now trades for over $60,000.
After their success with Bitcoin, the twins have become cryptocurrency evangelists, advocating for its democratization and encouraging Wall Street to get on board. They have also used their wealth to support political campaigns, donating more than $100,000 to New York’s Andrew Cuomo and California’s Gavin Newsom during their respective governorship election cycles in 2018.
The twins launched Gemini Trust Company in 2014, with Gemini Exchange following in 2015. In 2019, they praised their credibility and commitment to consumer protection and safety in an interview with Quartz, discussing their marketing campaign “the revolution needs rules.”
According to Tyler, their goal with this campaign is to educate the public about exchanges like Gemini that operate with integrity and follow financial institution standards. With the recent settlement, it remains to be seen how this will impact the twins’ net worth, with both being listed on Forbes’ most-wealthy list with a net worth of $1.4 billion each.