Cameron Winklevoss, co-founder of cryptocurrency platform Gemini, announced that they have filed individual lawsuits against Digital Currency Group and its chairman, Barry Silbert. In the lawsuit, he accused DCG and Silbert of fraud.
Gemini sues DCG and Barry Silbert
United States-based cryptocurrency exchange Gemini has announced that it has initiated legal action against Digital Currency Group (DCG) holding and CEO Barry Silbert for alleged “fraud against creditors”. Arriving in a New York court on July 7, Gemini claimed that DCG and Silbert had conspired to lend Genesis “large amounts of cryptocurrencies and US dollars.” According to the dossier, Gemini seeks to recover funds resulting from “DCG and Silbert’s false, misleading and inaccurate statements and omissions against Gemini” and their role in “encouraging and facilitating Genesis’ fraud against Gemini.” He also adds that the firm will also pursue legal avenues in Genesis’ bankruptcy case.
Genesis was a DCG subsidiary cryptocurrency lending company. The company was responsible for operating an Earn program in partnership with Gemini, which was launched in 2021. The program claimed that Gemini users could lend crypto to Genesis with the promise that the firm would repay it with interest. However, the firm stopped withdrawals in November 2022, citing “unprecedented market turmoil.” He then filed for bankruptcy under Chapter 11.
“Silbert knew that the cryptocurrency platform was bankrupt.”
According to Gemini co-founder Cameron Winklevoss, Silbert knew that Genesis was “largely bankrupt” while Earn was trying to get on with the program. The complaint included allegations of DCG and Silbert’s false financial reporting that began with the collapse of Three Arrows Capital in June 2022, “which left a $1.2 billion hole in Genesis’ balance sheet.” Winklevoss claimed that Genesis and DCG owed $900 million to Gemini’s customers. In this direction, Winklevoss made the following claims:
Barry, DCG and Genesis conspired to create false financial reports to hide the truth from Gemini and its creditors. This scam stretches all the way to the top. Barry Silbert and other DCG executives were directly involved in these lies. They have also repeatedly lied to hide the truth from Gemini and other creditors.
The history of the war between the parties
cryptocoin.comAs you follow, Winklevoss has previously threatened to sue DCG and Silbert. He cited delays in resolving issues between Gemini and Genesis as the reason. Finally, he gave the CEO until 2028. During that time, he published an open letter with an offer of $1.47 billion. DCG responded via Twitter on July 7 that the lawsuit was an “advertising game” by Winklevoss. It also stated that any allegations of misconduct are “baseless, defamatory and completely false”.
The fallout from the Earn program has made both Genesis and Gemini the target of federal and state regulators. The U.S. Securities and Exchange Commission (SEC) filed lawsuits against the two firms in January. The SEC claimed that these cryptocurrency platforms offer unregistered securities. Meanwhile, the New York Department of Financial Services is investigating Gemini for allegations in the Earn program.
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