Gemini files lawsuit against Digital Currency Group and Barry Silbert over Genesis and Earn program

United States-based cryptocurrency exchange Gemini has announced legal action against conglomerate Digital Currency Group (DCG) and its CEO Barry Silbert, claiming “fraud against creditors”.

In a petition filed in a New York court on July 7, Gemini alleged DCG and Silbert engaged in a scheme to loan Genesis “a large amount of cryptocurrency and US dollars”. According to the filing, Gemini seeks to recover monies incurred as a result of “DCG and Silbert’s false, misleading, and incomplete representations and omissions to Gemini, and defendants’ role in encouraging and facilitating Genesis’ fraud against Gemini.” . Follow the legal route in the bankruptcy case of Genesis.

Genesis was the crypto lender to operate the Earn program in partnership with Gemini. However, the company halted withdrawals in November 2022, citing “unprecedented market turmoil” and subsequently filed for Chapter 11 bankruptcy.

According to a July 7 Twitter thread from Gemini co-founder Cameron Winklevoss, Silbert knew Genesis was “largely insolvent” when attempting to continue the Earn program. The complaint included alleged false financial reporting by DCG and Silbert, starting with the collapse of Three Arrows Capital in June 2022, which “punched a $1.2 billion hole in Genesis’s balance sheet”.

The Winklevoss claimed, “Barry, DCG and Genesis all conspired to fabricate false financial reports to hide the truth from Gemini and the creditors.” “This fraud goes all the way up. Barry Silbert and other DCG officials were directly involved in these lies and lied repeatedly to hide the truth from Gemini and other creditors.

1/Today, @Gemini filed a lawsuit against @DCGco And @barrysilbert In person 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 its execution.

— Cameron Winklevoss (@Cameron) 7 July 2023

This is a developing story, and more information will be added as it becomes available.