Gemini sues Digital Currency Group and Barry Silbert
Date: 2023-07-09 Author: Karina Ziganova Categories: BUSINESS
The founders of the Gemini crypto exchange, Cameron and Tyler Winklevoss, claim that the CEO of Digital Currency Group, Barry Silbert, was the "architect and organizer of the fraudulent scheme" that DCG and Genesis Capital pulled off.
Crypto exchange Gemini has filed a civil lawsuit against Digital Currency Group and its CEO Barry Silbert. At the heart of the lawsuit is a dispute over the insolvency of Genesis Capital, a firm with which Gemini collaborated under the Earn program.\
The Winklevoss brothers announced that they were filing a lawsuit on social media, as well as several allegations of fraud and foul play against Silbert for his role in covering up Genesis' problems.
DCG, in turn, said that the accusations and the lawsuit are nothing more than a "publicity stunt" by the Winklevoss twins, which will allow them to avoid responsibility for managing the Gemini Earn program. The company also added that it remains committed to finding the best solution for all parties involved in bankruptcy proceedings.
Gemini accuses DCG and Silbert of defrauding investors
According to Winklevoss, the collapse of Three Arrows Capital "made a $1.2 billion hole" in Genesis's balance sheet. However, instead of warning investors and lenders, the company hid this fact with the help of DCG and Silbert.
"Barry, DCG and Genesis conspired to create false financial statements to hide the truth from Gemini and creditors. Silbert was the chief architect and organizer of the fraudulent scheme, and DCG's senior management was involved in covering up the truth.
Gemini partnered with Genesis through the Earn program. However, when Genesis became insolvent, it suspended withdrawals, effectively locking up about $1.45 billion worth of user assets.
The Winklovoss brothers also reported that Silbert tried to dissuade Gemini from stopping working with Genesis, despite knowing that the company was essentially bankrupt.
"The fraud has reached the very top. Barry Silbert and other DCG executives were directly involved in this lie, and they lied over and over again to hide the truth from Gemini and other creditors.
Genesis told creditors that from an operational point of view, everything is fine because DCG intervened to cover the losses. However, the latter never had the intention of absorbing losses.
Gemini has set a deadline of July 6 for DCG and Genesis to settle the debt repayment issue. Otherwise, the company will start legal proceedings. DCG, Genesis, and Silbert are also suing various Genesis creditors in a separate class action lawsuit
