DCG seeks to dismiss Gemini’s lawsuit

DCG has moved to dismiss Gemini’s lawsuit against it and founder Barry Silbert.

“DCG looks forward to the resolution of this ridiculous lawsuit as we continue to work toward our mission of accelerating the development of a better financial system,” the statement said.

According to the motion, DCG and Silbert did not participate in the operations of Genesis Global Capital’s subsidiary and the Gemini Earn program.

“… Gemini asserts that the defendants aided and abetted the alleged Genesis fraud through various corporate transactions and documents. … There are no credible allegations that the defendants actually knew about any alleged fraud,” the document said.

For 2022, Digital Currency Group recorded a loss of $1.1 billion. The main cause was problems at its Genesis Global Capital subsidiary.

On 16 November 2022, the division froze withdrawals and the issuance of new loans. The firm cited “heightened withdrawal requests” from clients after the collapse of FTX.

The source of the difficulties was the collapse of the hedge fund 3AC in July of that year. The latter failed to meet obligations to Genesis Global Capital for $2.36 billion. DCG backed the firm.

In January 2023, Genesis Global Holdco and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to media reports, their liabilities exceed $3 billion. This amount includes client claims against Gemini for $900 million.

In May, DCG defaulted on a payment of $630 million as part of compensation to Gemini Earn users.

In July, the Winklevoss twins’ exchange filed a lawsuit against Digital Currency Group and Barry Silbert, calling the latter “the architect and inspirer of the fraud.”