Gemini, the Winklevoss twins’ cryptocurrency exchange, has filed a lawsuit against Digital Currency Group (DCG) including its CEO, Barry Silbert. The lawsuit is the result of a disagreement with Genesis Capital, a company that had an important relationship with Gemini.
The co-founder of Gemini made multiple claims of fraud and intentional misconduct against Silbert in a public announcement. Winklevoss alleged that Silbert and DCG collaborated to conceal Genesis’ financial problems while knowing the company was bankrupt.
According to Winklevoss, Genesis’ failure resulted in enormous financial loss, but the company buried this data with the help of DCG. Silbert was accused by Winklevoss of being the principal organizer of the alleged fraud. He further stated that other top officials at DCG were engaged.
Gemini had worked with Genesis on its Earn program, but when Genesis went bankrupt, it froze withdrawals, locking up nearly $1.45 billion in assets. This certainly has an impact on Gemini Earn users.
— Walletor (@walletorapp) July 7, 2023
Gemini decided to cancel the program and asked DCG to pay back the debt over a five-year period. Winklevoss claimed, however, that Silbert interfered and prevented Gemini from terminating the agreement. Despite knowing Genesis’ poor financial state, this was done.
Winklevoss claimed that DCG and Genesis fabricated financial records in order to create a fictitious 10-year contract with no real value. They lied to Gemini and other creditors by misrepresenting this note as a “Current Asset” worth $1.1 billion. According to Winklevoss, the claimed conduct led to Genesis filing for bankruptcy six months after the company became insolvent.
Finally, Gemini’s case centers around charges of fraud and deception relating to Genesis Capital’s insolvency. The legal battle shows the blockchain industry and its affiliated partnerships complexity and difficulty. At the end of the day, make sure you stay safe while we keep an eye on this subject.