The DCG filing notes that Silbert and the company “played an insignificant role in the Gemini Earn program”, and Gemini’s allegations of fraudulent behavior don’t hold merit.
Venture capital giant Digital Currency Group (DCG) has recently filed a motion for dismissing a lawsuit from crypto exchange Gemini, alleging fraud to the users of its Earn program.
The Digital Currency Group (DCG) submitted its filing to the United States District Court for the Southern District of New York, on Thursday, August 10. In the motion, DCG CEO Barry Silbert and lawyers note that Gemini’s lawsuit filing last month was a “continuation of [a] public relations campaign” targeting the firm on social media with “personal, vicious, and false” claims.
Last month, crypto exchange Gemini complained that they are seeking to recover funds as a result of “DCG’s and Silbert’s false, misleading, and incomplete representations and omissions to Gemini” and their role “in encouraging and facilitating Genesis’s fraud against Gemini”.
Genesis, a subsidiary of DCG, managed a cryptocurrency lending initiative known as the Earn program, which was introduced in collaboration with Gemini in 2021. The program offered Gemini users the opportunity to lend their crypto to Genesis, with the commitment of receiving it back along with interest. Regrettably, Gemini suspended withdrawals in November 2022, attributed to “unprecedented market turmoil”. Later, the situation ultimately led to the company seeking Chapter 11 bankruptcy protection in January 2023.
DCG Blames the Gemini’s Winklevoss Twins
As per the DCG submission, Silbert and the company “played an insignificant role in the Gemini Earn program”, and Gemini’s allegations of fraudulent behavior don’t hold merit. The filing highlights that the claims made in the Complaint against non-defendant Genesis lack supporting evidence. DCG also pointed out Gemini’s failure to present these claims during the Genesis bankruptcy, which contradicts their sensational nature. The Digital Currency Group noted:
“The lawsuit is a baseless continuation of Cameron and Tyler Winklevoss’ year-long Twitter-based character assassination and public relations campaign to deflect blame from their own mismanagement. DCG looks forward to moving past this ridiculous lawsuit as we continue working towards our mission of accelerating the development of a better financial system.”
In 2022, the downfall of Three Arrows Capital led to a reported $1.2 billion in unsettled funds for Genesis due to bankruptcy issues. Cameron and Tyler Winklevoss, the founders of Gemini, allege that both Genesis and DCG owe the exchange’s customers $900 million.
Gemini and Genesis are confronting a legal suit from the US Securities and Exchange Commission (SEC), filed in January regarding their Earn program. The SEC noted that the program involved the sale of unregistered securities. New York State’s Department of Financial Services is also investigating the exchange on similar grounds.