Building the Brand of Trust
Since entering the crypto space after their infamous battle with Mark Zuckerberg over Facebook, the Winklevoss twins have cultivated a specific brand: regulated, reliable, and safe. They weren't the hoodie-clad anarchists of crypto's early days. They were well-spoken,
suit-wearing entrepreneurs who sought regulatory approval and positioned their exchange, Gemini, as the institutional-grade gateway to digital assets. They talked about playing the “long game” and building a trustworthy platform. This image was their greatest asset, attracting investors who were curious about crypto but wary of its wild-west reputation. They weren’t just building an exchange; they were building an argument that crypto could be for everyone, provided it was handled by the right people.
The One Thing: The Illusion of Safety
For all their talk of regulation and security, the single most accurate criticism leveled against the Winklevosses was that they used this reputation as a marketing shield while allegedly exposing their customers to massive, poorly disclosed risks. The argument wasn't that they were incompetent, but that they consciously blurred the lines between their regulated, secure exchange and riskier, quasi-independent financial products. The critics’ core point was that Gemini’s brand promised a level of safety that simply didn't apply to all its offerings. This wasn’t a minor flaw; it was a fundamental contradiction at the heart of their business model, and it would have devastating consequences.
Exhibit A: The Gemini Earn Catastrophe
The proof is in the pudding, and the pudding was Gemini Earn. Marketed as a low-risk way to earn interest on crypto holdings, the program attracted over 230,000 investors. Gemini presented it with the same slick, trustworthy branding as its main exchange. The problem? Behind the scenes, Gemini was loaning customer assets to a third party, Genesis Global Capital, which in turn made risky loans. When Genesis became insolvent following the collapse of FTX, approximately $900 million in Gemini Earn customer funds were frozen. The New York Attorney General’s lawsuit alleged Gemini knew Genesis’s loan book was risky long before the collapse but continued to market Earn as a safe bet. In February 2022, Gemini's own analysis reportedly downgraded Genesis's credit rating to junk status, yet investors were never informed of this critical change.
Regulation as a Prop
This is where the critics' point lands hardest. The Winklevosses relentlessly touted their compliance-first approach. Gemini was one of the first exchanges to become a New York trust company, a high bar for regulatory oversight. But Gemini Earn was not part of that regulated core. It was an unregistered security offering, as later charged by the SEC and the New York AG. They leveraged the hard-won trust from their regulated business to sell an unregulated, high-risk product without making the distinction clear. New York Attorney General Letitia James put it bluntly, stating Gemini “lied to investors” and “repeatedly assured investors that investing with Genesis through their Gemini Earn program was a low-risk investment.” The very thing that made them seem different from other crypto cowboys—their embrace of rules—was used as a tool to seemingly bypass them.
