Gemini Sues Dcg For Fraud

2023-07-07 02:00:18

(MENAFN- CoinXposure) Gemini, a US cryptocurrency exchange, has sued Digital Currency Group (DCG) and its CEO, Barry Silbert, for“fraud against creditors.” Gemini said DCG and Silbert loaned Genesis“huge amounts of cryptocurrency and U.S. dollars” in a July 7 New York court filing.

Gemini seeks to recover funds from“DCG's and Silbert's false, misleading, and incomplete representations and omissions to Gemini” and their role“in encouraging and facilitating Genesis's fraud against Gemini,” according to the filing.

Genesis, a DCG subsidiary, was the crypto lender for Gemini's 2021 Earn program. Genesis promised to reimburse Gemini users' crypto with interest.

In November 2022, alleging“unprecedented market turmoil,” the firm ceased withdrawals and filed for Chapter 11 bankruptcy. Gemini co-founder Cameron Winklevoss tweeted on July 7 that Silbert knew Genesis was“massively insolvent” when continuing the earn program .

DCG and Silbert were accused of misleading financial reporting when three arrows capital collapsed in June 2022,“blowing a $1.2 billion hole in Genesis's balance sheet”.

Winklevoss claims Genesis and DCG owe Gemini's clients $900 million. Winklevoss said Barry, DCG, and Genesis collaborated to generate fake financial reports to deceive Gemini and creditors.

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“This fraud is top-level. Barry Silbert and other DCG officials misled Gemini and other creditors repeatedly. Winklevoss had repeatedly threatened to sue DCG and Silbert for delays in resolving Gemini and Genesis concerns, most recently sending an open letter to the CEO suggesting a“best and final offer” of $1.47 billion by 2028.

DCG called the lawsuit a“publicity stunt” by Winklevoss and“baseless, defamatory, and completely false” on Twitter on July 7. After Earn, federal and state officials targeted Genesis and Gemini.

In January, the u.s. securities and exchange commission sued the two firms for providing unregistered securities, while New York's Department of Financial Services was probing Gemini's Earn program promises.

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