Larry Summers gives up advisory role at crypto firm DCG amid criticism
Larry Summers, the Harvard professor and former top financial advisor during the Obama administration, has cut ties with troubled crypto conglomerate Digital Currency Group (DCG).
Summers joined DCG as a senior advisor in 2016, a year after DCG was formed. It’s not clear when Summers resigned his role — through a spokesperson, Summers told Protos he left DCG several months ago.
However, the former US Secretary of the Treasury was listed on DCG’s website as a member of the company’s advisory board as recently as November. That information has since been removed from DCG’s website.
Summers’ own personal website was updated on Wednesday, eliminating any mention of his six-and-a-half-year relationship with DCG from his bio – shortly after the professor and DCG were contacted by Protos for this article. A Summers spokesperson said that the professor’s resignation from DCG was part of a “scaling back of commitments,” but declined to detail what other positions Summers had also recently given up.
A spokesperson for DCG did not return a request for comment.
Summers poked the FTX bear at DCG
Summers has previously faced criticism for his role at DCG, most recently due to his comments about Sam Bankman-Fried’s crypto
Following the interview, influential Washington watchdog group The Revolving Door Project said that Summers and Bloomberg should have disclosed the top economist’s own ties to crypto companies including DCG. DCG’s own ties to FTX weren’t disclosed either.
DCG has been under pressure since early November when Genesis Global Capital, a major crypto lender and subsidiary of DCG, halted customer withdrawals in the wake of FTX’s collapse. Genesis, the DCG subsidiary, was a major trading partner with FTX, and had as much as $175 million of its assets stuck at the now bankrupt crypto exchange when it unraveled. DCG also had a small equity investment in FTX.
FTX owes $3B to 50 creditors including Genesis and BlockFi
Read more: Genesis still consistently inconsistent amid bankruptcy claims
Earlier this week, Gemini co-founder Cameron Winklevoss criticized DCG’s CEO and founder billionaire Barry Silbert of engaging in “bad faith” negotiating tactics with Gemini and other Genesis creditors. Silbert, in a tweet, said some of the claims in the Gemini founder’s letter were not accurate.
Genesis owes Gemini $900 million. The money comes from Gemini Earn, which until recently offered average investors high-interest savings accounts. The accounts were frozen when Genesis halted customer withdrawals. Gemini said the money in those Earn accounts was sent to Genesis to lend out, generating Earn’s high interest payouts.
Winklevii and Summers go way back
Cameron Winkelvoss and his twin Tyler have some history with Summers as well. Summers was president of Harvard University when the brothers had their well publicized battle with Mark Zuckerberg over the founding of Facebook.
An interaction between Summers and the Winklevoss twins, known collectively as Winklevii, became fodder for a funny scene in “The Social Network,” a movie that recounted the founding of Facebook.
Zuckerberg eventually settled with the Winklevoss twins, paying them cash and stock, which by the time of the settlement was worth nearly $100 million. Nonetheless, in an interview with Fortune, Summers later said the Winklevoss twins had acted like “assholes.”
Protos has reached out to Winklevii and will update this piece should we hear back.