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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.

After their famous Facebook settlement, the Winklevosses made some questionable investments. There was Treats!, a porn magazine, in 2014. There was Hukkster, an online retailer, soon after. Cameron co-founded “Guest of a Guest,” a “Page Six” knockoff. But their bitcoin bet was an unqualified jackpot. As Mezrich describes in his more recent book, it began at an Ibiza foam party called F@@k Me I’m Famous. A man they’d never met buttonholed them about “the oldest social network on earth.” He was talking about money, specifically in the form of the digital currency, and the twins were hooked. They bought up about 1 percent of all the bitcoin in the world. At first, they tried to turn their investment into a kind of company of its own, the world’s first exchange-traded fund for bitcoins. This would give the investing public an easy way to make the digital currency part of their 401(k)s — all for a small fee — but their applications were repeatedly denied by federal regulators.

Still, Gemini was their biggest idea. Following the 2014 debacle of Mt. Gox — the largest bitcoin exchange in the world until it was hacked and robbed — there was a strong appetite for reliable crypto companies. “It was super exciting,” an early executive said of Gemini’s formative years. “I was working my ass off and I loved it.” Early on, the twins went out of their way to involve the New York Department of Financial Services, a historically nosy Wall Street regulator, and by 2015 would be one of the first to get a charter allowing it to operate in the state.

The business plan was to be one step ahead of Wall Street. As the hedge funds and Goldman Sachses of the world discovered crypto, the thinking went, Gemini would already be there, an inviting gateway into this new realm. Gemini was scrupulous about following the rules, employees said. In addition to working with New York regulators, the Winklevoss brothers would fly to Europe to meet with the financial authorities there. Gemini’s ad campaigns had taglines like “Crypto Without Chaos” and “The Revolution Needs Rules.” Whenever Gemini wanted to list a new digital currency for customers to trade, it informed the Department of Financial Services ahead of time, giving the regulators the chance to register an objection. Most times, DFS officials would either approve the request or decline to act against them — which, in effect, was seen to be the same thing, according to people familiar with the inner workings of the company. Generally, this plan worked. By 2019, Gemini had captured about 5 percent of the U.S. crypto exchange market — a small, but valuable, slice of a rich new industry.

In a wonderful twist of irony, Gemini nearly captured the business of a certain blockbuster client: Zuckerberg. Starting in 2018, the Facebook founder wanted to launch his own cryptocurrency, called Libra. At one point, according to three people directly familiar with the plans, Libra’s parent company was preparing to issue the digital currency through Gemini. Gemini employees had figured that DFS regulators were fine with it after hearing nothing back from a proposal. “It technically was approved,” said one person. The PR value of the plan would have been hard to overstate — here were the twins, getting back into business with their onetime nemesis, letting bygones go on a grand quest to get insanely rich. It was only after informing regulators again — extra safe, by the rules — that they raised concerns about the launch. Libra encountered further regulatory scrutiny after that, particularly on concerns that Facebook was too big, and was quietly euthanized in 2022.

In the months preceding the pandemic, ex-employees told me, something began to change. Their market share was not growing. Their biggest U.S. competitor, Coinbase, was becoming the go-to exchange. “We felt like we were missing out,” one ex-employee said. Abroad, the growth was even bigger. Binance, which had no headquarters (and thus no obvious regulatory obligations), had cemented itself as the world’s largest exchange. Sam Bankman-Fried’s FTX was also growing rapidly from its offshore outpost in Hong Kong, before relocating to an even friendlier jurisdiction in the Bahamas (where it would commit its epic $14 billion fraud). Inside Gemini, the bet on institutional customers appeared to be going nowhere. Goldman wasn’t giving them real business, and they were getting as much as they’d hoped from hedge funds, insiders said.

In 2020, the twins decided it was time for a pivot. They no longer wanted Gemini to be just an exchange where customers traded crypto. Instead, it would look more like a consumer bank, selling lots of financial products — credit cards, bank accounts, maybe even mortgages, one ex-employee said. At the center of that was a top-secret project called Earn, which would basically act like a high-yield checking account, except for crypto holdings instead of cash. “We would have this savings-like account. That’s how we viewed it internally, even though we never ever say that publicly anywhere, because we knew that we weren’t allowed to say that,” one person directly involved with the program said. It was an aggressive move to offer the general public a brand new interest-bearing product without clear regulatory approval — and this time Gemini didn’t ask the Department of Financial Services for permission ahead of time, according to two people familiar with the approval process. To knowledgeable observers in the crypto world, the logic of the Winklevosses’ strategy shift toward riskier and more aggressive product offerings was obvious enough. “They were hemorrhaging market share,” said Cory Klippsten, the CEO of Swan Bitcoin, a digital currency financial services company. “In an effort to stay alive, they basically did exactly what SBF did, which was go after retail deposits.”

Earn worked by, essentially, connecting Gemini’s generally conservative customers and some of crypto’s wildest risk-takers. Gemini depositors could opt to put their crypto (say, their bitcoin or ethereum) in a special account that would pay them interest — as much as an 8 percent annualized — on the balance. For many depositors, it seemed like an easy way to make a little extra income while they waited for their crypto bags to moon. But, of course, the yield had to come from somewhere. At a traditional bank, a checking account yield comes from the bank lending out those same funds at a higher rate of interest. In the case of Earn, Gemini would lend out their customers’ crypto to other players in the industry (with crypto speculation at a fever pitch, there was a strong institutional demand to borrow crypto for trading) for a higher rate of interest than it ultimately paid to its customers. If everything went smoothly, it was win-win.

Inside Gemini, people involved said, the whole process of setting up the program took nearly a year, and involved intense debates about what kind of interest rates they should offer and whether they should lend out the crypto to multiple partners or only one. Gemini’s product managers considered partnering with a handful of lenders, including two companies that were successful doing what Earn aimed to do, paying retail investors interest on their crypto holdings by lending them other institutions. One was BlockFi, a firm that the twins had already invested in. The other was Celsius, a competitor. While the two firms appeared to be doing very well during the crypto bull market of 2020 and 2021, both would collapse in 2022 with their customers losing everything they had deposited. (Celsius’s founder, Alex Mashinsky, has since been charged with criminal fraud, and his trial is set for September 2024.)

When Earn was publicly announced in February 2021, Gemini’s press release did not mention any lending partner and instead touted its own safety and reliability “on par with those offered by top financial institutions,” the company said. The company it chose as a partner was Genesis Trading, a big institutional player in the crypto space. Like Gemini, it was based in New York City and a related entity, Genesis Capital, was regulated by state watchdogs. Genesis was also a subsidiary of one of the companies that helped create the crypto industry, Digital Currency Group. The parent company was sitting on the world’s largest bitcoin horde (over 600,000 of them, held as part of a lucrative publicly tradable product called the Grayscale Bitcoin Trust). Because Genesis was overseen by such a big moneymaker — DCG booked more than $1 billion in revenue in 2021 — it was considered about as creditworthy as you could get in the crypto business.

Earn was a surprise hit and quickly became the Winklevoss twins’ biggest product. In the first two weeks, according to internal metrics, it brought in $500 million in deposits; a month later, Gemini had made $1 million in fees. By June, the internal data showed, 73 percent of the customers had 99 percent of their money in Earn. Gemini depositors loved it because they earn high interest rates for doing basically nothing, all while working with the “crypto without the chaos” company. “Gemini has always had a reputation for being a trustworthy and secure platform,” said one Earn depositor, Glen, who asked to have his full name withheld for security reasons and because his family doesn’t know. “I trusted Gemini and assumed that any partnerships they had would be equally trustworthy.” On the back of that success and a booming market generally for all things crypto, Gemini reached a valuation topping $7 billion. The twins made the Forbes billionaires list, with $6 billion between them.

Still, some Gemini employees were concerned. They thought that the crypto industry was too dependent on Genesis remaining stable and managing its risks intelligently. For skeptics, it looked like it could be a systemic point of failure in a larger crypto collapse. “If you didn’t know that Genesis was the counterparty to every interest-bearing crypto product, you were not paying attention,” one former Gemini employee told me. But an executive overseeing the project  “would repeatedly say that he thought that their financials were very strong and that they are blue chip or whatever. He seemed to think that they were trustworthy.”

In the end, Genesis Trading wasn’t trustworthy. Internal records revealed during the criminal trial of Bankman-Fried showed that Genesis didn’t play by anything resembling the rules of a traditional financial firm. For instance, the company routinely approved billions of dollars in loans over Signal chats. One former loan officer said that confidential information was kept unsecured on the company’s servers. “Our credit risk team was a sham. I don’t know what they were doing,” said another ex-employee. “They had no risk reporting at all,” said a third. “There wasn’t a way to look at the portfolio very easily.” By early 2022, Genesis had discovered that about 60 percent of all its loans were concentrated in Bankman-Fried’s hedge fund, Alameda Research – which, of course, would blow up spectacularly before the end of the year.

Gemini was not unaware of the risks it was taking by parking a huge chunk of its customers’ funds with Genesis, according to ex-employees and court documents. The attorney general’s office alleged that Gemini’s risk team had downgraded Genesis’s risk level to junk status by February 2022. In the spring of that year, a Genesis employee privately met with Jared Shaw, Gemini’s head of finance, to tell him about how concentrated Genesis was in Alameda. (Shaw hadn’t responded to a request for comment prior to publication. Afterwards, he said “I had no private meetings or met with anyone at Genesis while at Gemini.”)

As 2022 rolled on, everything was starting to come apart — fast. In May, two of the world’s biggest cryptocurrencies, TerraUSD and Luna, collapsed, instantly evaporating $60 billion from the larger crypto economy. A month later, the hedge fund Three Arrows Capital went under, defaulting on more than $3 billion in obligations — including $2.3 billion in loans from Genesis, according to court records. According to the attorney general’s suit, this nearly led to Genesis’s bankruptcy. DCG, its parent company, issued a promissory note that appeared to plug a $1.1 billion hole in its balance sheet, though no money was actually exchanged. (One former Genesis employee said that the flimsy nature of DCG’s support was not known among rank-and-file employees at Genesis.)

At Gemini, the steep decline in crypto markets following the Terra-Luna and Three Arrows debacles only appeared to make the twins more remote. In January 2022, the twins had hired a new chief technology officer, Pravjit Tiwana, from Amazon. Seen internally as a likely candidate to one day run the exchange, Tiwana favored the kind of move-fast-and-break-things model that Silicon Valley ran on, dismantling the company’s quality assurance team, and pushing out several of the most experienced people on the risk team, former employees said. Tiwana was widely unpopular among those who’d helped build the company in its early years, particularly for weekly, companywide presentations where, ex-employees said, he and his lieutenants would grill employees on why they hadn’t hit goals that seemed far out of reach. (Tiwana left the company on November 15.) After laying off 10 percent of Gemini’s workforce in June, the twins went on a band tour, where they would play covers of Rage Against the Machine and Blink-182, among others. In one widely circulated clip of their set, they couldn’t quite remember the words to “Don’t Stop Believin’”:

Meanwhile, the problems with Earn were growing more obvious inside the company. Requests from Gemini risk officers for standard disclosures — like who Genesis was loaning money to — went unanswered, two people said. According to the New York attorney general’s lawsuit, Gemini knew that Genesis wouldn’t have the money to pay back its loans if it went under. Cameron said during a board meeting that Genesis was “lying about financials.” A lawsuit that Gemini would later file against the lender claims that Genesis gave them “falsified balance sheets and other financial reports, which falsely indicated that [Genesis] was solvent when in reality it was not.”

On October 13, Gemini gave Genesis 30 days notice that it would end the Earn program, court documents show. However, according to the attorney general’s suit, Gemini never stopped promoting Earn on its website and continued to funnel money into the soon-to-be bankrupt lender. Before those 30 days were up, Bankman-Fried’s crypto empire collapsed, revealing his extensive criminal fraud and sending crypto markets into freefall. Simultaneously, the true extent of Genesis’s risky lending was exposed. With so many loans concentrated with Alameda, Genesis was insolvent and soon after declared bankruptcy. When it did so, the $900 million in Earn customer funds that it controlled immediately became frozen — as they remain today. (Since those funds are invested in crypto and those markets are up dramatically in 2023, the overall value of the Gemini customer assets trapped with Genesis is now more than $1.1 billion.)

In the wake of the collapse, the twins tried to come to a settlement with DCG and its founder and CEO, billionaire and longtime crypto-Twitter troll Barry Silbert. During these negotiations, four people who were either inside one of the companies or were briefed on the discussions directly were told that Silbert and the twins discussed paying back customers some portion of their deposits immediately — but less than what they’d deposited. The payments would have taken the form of shares of DCG’s Grayscale Bitcoin Trust — which the twins’ exchange had secured in collateral, according to the suit filed against Genesis by Gemini.

The talks collapsed in December, and soon after, one of Gemini’s attorneys, Niels Gjertsen, left the company. (Gjertsen declined to comment.) The twins would soon take their fight against Silbert to Twitter, and add to their portfolio of lawsuits when they sued Genesis in Manhattan federal bankruptcy court for more shares of the bitcoin trust. (The U.S. Securities and Exchange Commission filed a civil suit accusing both companies of other financial violations that month.) Silbert’s company has claimed that Gemini’s suit is a “publicity stunt,” while Gemini is accusing its former lending partner of basically stealing from Earn customers. With the dispute playing out in court, Gemini’s Earn customers are still in limbo. Their assets show up in their accounts, but they are unable to access them. The day before Thanksgiving things got even worse: Genesis filed a suit seeking to claw back $689 million from Gemini customers who were able to get their money out before the collapse, making it less clear when or whether the other customers will ever be able to do so. (It’s also unclear whether, should the customers ever get paid back, it would be in current crypto prices, or the dollar amount of assets at the time of the bankruptcy, which were much lower.)

Multiple former Gemini employees expressed frustration at what they saw as a mishandling by the Winklevoss brothers of a situation that didn’t need to leave the exchanges customers stranded and fearful of losing their assets. Among the victims are a 79-year-old grandmother who, according to the attorney general’s suit, invested her husband’s entire $199,000 savings into the program. She “had hoped to use this money to pay for her grandchild’s education. Outside of her Earn investment, she and her husband have little savings,” according to the suit. Glen, the depositor, declined to say how much he put into Earn but said that he’s had to delay a medical procedure because his money is frozen. “As for Gemini, I do believe they bear some responsibility, considering they were the ones offering and promoting the Earn program,” he said. “It seems only fair that they should cover at least a portion of the deposits to help mitigate the losses for users like myself.”

The twins are fighting the New York State charges against their business. Silbert is doing the same. (While Silbert was named as a defendant in the attorney general’s suit, the Winklevosses were not. Representatives from Gemini and Genesis didn’t respond to requests for comment.) Regardless of the outcome, the Winklevosses’ big opportunity appears to have passed them by. Coinbase, its largest U.S. competitor, saw 42 times more trading volume than Gemini on one recent November day, according to publicly available data. Its CEO, Brian Armstrong, has already cast himself as the most trustworthy major crypto CEO left. “We now have an opportunity to start a new chapter for this industry,” he recently said on X. In fact, the new chapter looks a lot like the vision that the twins first pitched before the last bubble burst.

In the crypto world, investors are preparing for another boom. Bitcoin has more than doubled off its 2022 lows. BlackRock, the world’s largest asset manager, is on the verge of offering its own bitcoin and ethereum ETFs — the very thing the Winklevosses tried to do a decade ago. JPMorgan Chase, the largest bank in the U.S., plans on issuing its cryptocurrency during the next year or so. Rather than scramble to win back a potential new wave of institutional business, the twins are, at least publicly, lamenting that they ever played by the rules at all. “We spent years doing things the right way, going in the front door, asking permission not forgiveness,” Cameron — or is it Tyler? — said in a June Instagram post. “And honestly, at this point, it’s unclear what good it’s done for us.”

This story was updated to include a comment from Jared Shaw denying meeting with any Genesis employees, and to clarify the timeline of the Genesis bankruptcy proceedings.