Digital Currency Group (DCG), the parent company of
Genesis Capital Global, seeks to counter claims of fraud raised by the
Winklevoss-owned Gemini Exchange. DCG has responded with a motion to dismiss
the allegations, terming them as a continuation of a public relation campaign
and a form of blame-shifting by the crypto exchange.
On July 7, Gemini
sued DCG and its
Founder, Barry Silbert, for allegedly defrauding investors through DCG’s
subsidiary Genesis. According to the lawsuit, DCG misrepresented the financial
situation of the subsidiary, which managed Gemini’s Earn program.
Thus, customers
continued to participate in the lending business of Genesis despite being aware
of its losses that were caused by the collapse of Three
Arrows Capital, a hedge fund
also known as 3AC. However, DCG has refuted the claims, saying the crypto
exchange failed to adequately substantiate its allegations.
In the lawsuit filed
today (Thursday), the group maintains that it had no direct operational
involvement with Gemini’s Earn program. Besides that, DCG claims that Gemini
encouraged its customers to lend digital assets to Genesis in exchange for an
interest income.
“Through the Gemini
Earn Program, Gemini actively encouraged its existing customers to lend their
digital assets, including cryptocurrency, to Genesis in exchange for interest,
representing to its customers that it was a sophisticated market participant
and that it had thoroughly vetted Genesis,” DCG wrote.
1/ Today, DCG filed a motion to dismiss the lawsuit filed by Gemini against DCG and Barry Silbert. Read the full preliminary statement here: pic.twitter.com/9DFOSY3t35
— Digital Currency Group (@DCGco) August 10, 2023
Introduced in 2021,
Gemini’s Earn program allowed retail customers to earn interest on their
cryptocurrencies by lending them to Genesis. However, the collapse of 3AC in
June 2022 and the subsequent fall of FTX five months later negatively affected
Genesis. Thus, the crypto lender suspended withdrawals from the Earn program and filed
for bankruptcy in
January.
DCG Takes On Gemini
DCG has termed Gemini’s
allegations as a continuation of a public relations campaign by Cameron and
Tyler Winklevoss. DCG alleges that the campaign is aimed at deflecting the
blame from the management of Gemini.
Additionally,
DCG is seeking dismissal of Gemini’s claims regarding a meeting where Silbert
reportedly assured the Winklevoss twins that DCG had absorbed the losses caused
by the collapse of 3AC. The filing revealed that DCG has successfully moved the
case from New York’s State Supreme Court to the US District Court for the
Southern District of New York.
Digital Currency Group (DCG), the parent company of
Genesis Capital Global, seeks to counter claims of fraud raised by the
Winklevoss-owned Gemini Exchange. DCG has responded with a motion to dismiss
the allegations, terming them as a continuation of a public relation campaign
and a form of blame-shifting by the crypto exchange.
On July 7, Gemini
sued DCG and its
Founder, Barry Silbert, for allegedly defrauding investors through DCG’s
subsidiary Genesis. According to the lawsuit, DCG misrepresented the financial
situation of the subsidiary, which managed Gemini’s Earn program.
Thus, customers
continued to participate in the lending business of Genesis despite being aware
of its losses that were caused by the collapse of Three
Arrows Capital, a hedge fund
also known as 3AC. However, DCG has refuted the claims, saying the crypto
exchange failed to adequately substantiate its allegations.
In the lawsuit filed
today (Thursday), the group maintains that it had no direct operational
involvement with Gemini’s Earn program. Besides that, DCG claims that Gemini
encouraged its customers to lend digital assets to Genesis in exchange for an
interest income.
“Through the Gemini
Earn Program, Gemini actively encouraged its existing customers to lend their
digital assets, including cryptocurrency, to Genesis in exchange for interest,
representing to its customers that it was a sophisticated market participant
and that it had thoroughly vetted Genesis,” DCG wrote.
1/ Today, DCG filed a motion to dismiss the lawsuit filed by Gemini against DCG and Barry Silbert. Read the full preliminary statement here: pic.twitter.com/9DFOSY3t35
— Digital Currency Group (@DCGco) August 10, 2023
Introduced in 2021,
Gemini’s Earn program allowed retail customers to earn interest on their
cryptocurrencies by lending them to Genesis. However, the collapse of 3AC in
June 2022 and the subsequent fall of FTX five months later negatively affected
Genesis. Thus, the crypto lender suspended withdrawals from the Earn program and filed
for bankruptcy in
January.
DCG Takes On Gemini
DCG has termed Gemini’s
allegations as a continuation of a public relations campaign by Cameron and
Tyler Winklevoss. DCG alleges that the campaign is aimed at deflecting the
blame from the management of Gemini.
Additionally,
DCG is seeking dismissal of Gemini’s claims regarding a meeting where Silbert
reportedly assured the Winklevoss twins that DCG had absorbed the losses caused
by the collapse of 3AC. The filing revealed that DCG has successfully moved the
case from New York’s State Supreme Court to the US District Court for the
Southern District of New York.