Digital Currency Group (DCG) has responded to a lawsuit filed by Gemini, accusing the company of defrauding its creditors. In the lawsuit, Gemini claims that DCG and its CEO, Barry Silbert, orchestrated and directly perpetrated a fraud against creditors. Specifically, Gemini alleges that Silbert pushed to continue the Earn program despite being aware of Genesis’ insolvency. Gemini co-founder Cameron Winklevoss further accuses Silbert and DCG executives of repeatedly lying to conceal the truth from Gemini and other creditors. Genesis, a subsidiary of DCG, owes nearly $1 billion to Gemini’s Earn program users and other creditors.
DCG Calls the Lawsuit a “Publicity Stunt”
In response to the lawsuit, DCG issued a statement dismissing it as a “publicity stunt” by Cameron Winklevoss. DCG asserts that any suggestion of wrongdoing by the company or its employees is baseless, defamatory, and completely false. The company explains that it has been actively negotiating with the representatives of the Official Unsecured Creditors Committee and Ad Hoc committee to reach a deal. DCG also criticizes Gemini’s leadership for being “missing in action” and issuing press statements while DCG has been working diligently to resolve the situation. The statement concludes by expressing optimism that the mediation process will soon bring the Genesis Chapter 11 case to a close.
Winklevoss Twins Challenge DCG’s Response
Tyler Winklevoss, co-founder of Gemini, took to Twitter to challenge DCG’s response. He pointed out that DCG and Barry Silbert failed to address or deny any of the allegations made in the 33-page complaint. Tyler questioned which parts of the complaint DCG considers to be “baseless, defamatory, and completely false.” He reiterated Gemini’s claim that DCG and Silbert were directly involved in misleading creditors about Genesis’ financial condition.
Gemini’s Lawsuit and Allegations
Gemini’s lawsuit centers around the collapse of Three Arrows Capital (3AC) in June 2022, which left a significant hole in Genesis’ balance sheet. According to Gemini, DCG reassured them at the time that it would absorb the losses. However, Gemini now claims that this was an intentional lie. The Winklevoss twins had previously warned DCG that legal action would be taken if the issue was not resolved.
The ongoing legal battle between Gemini and Digital Currency Group continues to escalate. Gemini accuses DCG and its CEO, Barry Silbert, of defrauding creditors and concealing the truth about Genesis’ financial condition. DCG, on the other hand, dismisses the lawsuit as a publicity stunt and asserts that it has been actively working to reach a resolution. The outcome of this case will have implications for the cryptocurrency industry and may shape future regulations and practices.