Summary:
- Barry Silbert, DCG, and Genesis knowingly committed fraud against Gemini customers, the lawsuit filed today alleges.
- Gemini insists that Genesis and DCG owe over $700 million to Earn users since late last year.
- The suit is the latest development in an ongoing spat between the company founded by the Winklevoss twins and Barry Silbert’s conglomerate
Gemini, a crypto exchange founded by the Winklevoss twins, is suing Barry Silbert and his conglomerate Digital Currency Group for knowingly defrauding Earn customers of nearly a billion in cryptocurrency.
The suit filed today in a New York court alleges that DCG, its CEO Barry Silbert, and its subsidiary Genesis misinterpreted financial statements knowing fully well the consequences of their actions. “Genesis was wildly insolvent,” Cameron Winklevoss said on Friday speaking about Silbert’s attempts to hide the massive hole in the lender’s finances.
Gemini Finally Takes DCG To Court Over Earn Program
Last year, Genesis was one of several entities with exposure to failed crypto hedge fund Three Arrows Capital. The lender suffered a $1.2 billion hole in its balance sheet before parent company DCG swooped in to absorb the losses, a move that Gemini insists was made up.
5/ It’s now clear this was a carefully crafted lie. DCG didn’t absorb any losses or provide real capital. Behind the scenes, DCG wrote Genesis a sham 10yr promissory note w/ a measly 1% interest rate – worth just a fraction of its $1.1b face amount. Genesis was wildly insolvent.
– Cameron Winklevoss tweets about Friday’s lawsuit against DCG & Genesis
A public spat ensued between the crypto exchange and Barry Silbert’s companies after Genesis filed for bankruptcy late last year. Genesis was the lending partner for Gemini’s Earn program and was unable to meet client demands. The crypto exchange claims that Genesis owes Earn users around $766 million, per filings.