Winklevoss’ Gemini exchange sues DCG Group and Barry Silbert in attempt to recover funds
- Gemini exchange hit Digital Currency Group with a lawsuit alleging fraud.
- The DCG Group’s subsidiary Genesis held funds for Gemini’s Earn program and turned insolvent, failing to return customer assets.
- Winklevoss’ lawsuit alleges that founder Barry Silbert asked Gemini to continue with the program while aware of DCG’s insolvency.
Winklevoss twins’ Gemini Trust Co has filed a lawsuit against Digital Currency Group (DCG) Inc. and CEO Barry Silbert. Gemini alleges DCG of fraud and deception.
The two firms have been at loggerheads since DCG subsidiary Genesis failed to return funds of Gemini’s Earn program users. The lawsuit accuses Barry Silbert of being aware of DCG’s insolvency while it held funds for Earn.
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Gemini hits DCG group with lawsuit
After months of attempting to recover funds of Gemini’s Earn program, the exchange founded by the Winklevoss twins filed a lawsuit against Digital Currency Group and its CEO Barry Silbert.
The dispute between Gemini and DCG’s subsidiary Genesis stems from the former’s Earn program and failure of the latter to return user assets due to insolvency. On July 3, Cameron Winklevoss, one of the founders of Gemini, published a letter to Barry Silbert in an attempt to recover lost user funds from the Earn program.
DCG subsidiary Genesis owes $766 million to Gemini, and over $3.5 billion to its 50 largest creditors (including the exchange), according to the bankruptcy filing from January 2023.
The lawsuit alleges that “Genesis was recklessly lending huge amounts to a counterparty that Defendants knew was using these huge amounts to fuel a risky arbitrage trading strategy,” according to the filing.
Cameron Winklevoss informed his 719,100 followers that Gemini notified Genesis it would be terminating the Earn program in October 2022, while DCG CEO Barry reached out to set up a meeting to induce Gemini to continue Earn.
Winklevoss alleges Silbert of being aware of DCG’s insolvency when suggesting that Gemini continue its Earn program. Winklevoss explains that Silbert’s actions were an attempt to cover part of the $1.2 billion hole in Genesis’ balance sheet from June 2022, the collapse of Three Arrows Capital (3AC).
1/ Today, @Gemini filed a lawsuit against @DCGco and @BarrySilbert personally in New York court. Barry was not only the architect and mastermind of the DCG and Genesis fraud against creditors, he was directly and personally involved in perpetrating it.
— Cameron Winklevoss (@cameron) July 7, 2023
Winklevoss informed the crypto community that he believes that DCG CEO Barry, and subsidiary Genesis conspired to create false financial reports to hide the truth from Gemini and creditors. FXStreet reached out to DCG, but did not receive a response at the time of publication.
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Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
