The Gemini cryptocurrency exchange has filed a lawsuit against Digital Currency Group (DCG) and its founder Barry Silbert, co-founder Cameron Winklevoss said.
\”Barry was not only the architect and inspirer of the fraud by DCG and Genesis against creditors, but directly and personally participated in its execution,\” wrote Winklevoss.
The Иск is aimed at recovering losses Gemini says it suffered as a result of \”false, misleading and incomplete representations and omissions by DCG and Silbert.\”
According to Winklevoss, the founder of Digital Currency Group knew of Genesis’s insolvency. In his statements he allegedly concealed \”a gaping hole in the firm’s balance sheet\” of $1.2 billion.
\”Barry, DCG and Genesis conspired to create false financial statements to hide the truth from Gemini and creditors,\” the exchange’s co-founder emphasised.
Representatives for DCG described Gemini’s lawsuit as \”yet another publicity stunt\” by Cameron Winklevoss designed to \”shift blame from himself and the company\”.
\”Any suggestion of wrongdoing by DCG or any of its employees is unfounded, libellous and completely false,\” the statement says.
The suit followed Winklevoss’s $1.46 billion offer to the DCG founder as part of settling his debt.
The parties seek an amicable resolution to the February 2023 Genesis’ creditors’ agreement, under which creditors would recover 80% of the funds lost. The arrangements envisaged a gradual write-down of Genesis’s loan portfolio and the sale of insolvent entities.
However, in May DCG missed a payment to compensate the Bitcoin exchange of $630 million. Gemini filed suit, demanding the immediate return of $1.1 billion for the 232,000 Earn users affected.
Genesis owes more than $3.5 billion to its 50 largest creditors, including Gemini, Cumberland, Mirana, MoonAlpha Finance and New Finance Income Fund VanEck.
Financial backing for the group’s lending arm was needed after the June 2022 collapse of hedge fund Three Arrows Capital.
On November 6, 2022 Genesis Global Capital froze withdrawals and the issuance of new loans. The firm cited \”heightened client demand\” after the \”collapse of FTX\”.
In January 2023 Genesis Global Holdco and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to reports, their liabilities exceed $3 billion.