Gemini Sues DCG and Its Founder Barry Silbert

Crypto exchange Gemini announced it has filed a lawsuit against Digital Currency Group (DCG) and its founder and CEO Barry Silbert in New York court, alleging they committed fraud through DCG subsidiary Genesis. Gemini co-founder Cameron Winklevoss said on Twitter that Silbert "was not only the architect and mastermind of the DCG and Genesis fraud against creditors, he was directly and personally involved in perpetrating it."

The lawsuit aims to recover Gemini's losses from DCG. Gemini used to partner with Genesis to launch Gemini Earn, but following Genesis's crisis last November and bankruptcy in January, Gemini Earn was frozen and users couldn't reclaim funds. According to Winklevoss, more than $1.2 billion is stuck in Genesis. Earlier this week, Winklevoss demanded DCG to pay a total of $1.465 billion, which he called "the best and final offer".

Winklevoss said, "when Gemini notified Genesis it would be terminating the Earn program in October 2022, Barry reached out to set up a meeting to induce Gemini to continue Earn. He did this knowing Genesis was massively insolvent." In addition, Genesis once claimed that DCG had absorbed the losses caused by Three Arrows Capital's collapse, but in fact, "DCG didn't absorb any losses or provide real capital".

After the lawsuit was announced, DCG released a statement, saying that Gemini's allegations were "baseless, defamatory, and completely false". It claimed that its leadership "has been working around the clock over the course of multiple months in active negotiation with representatives of the Official Unsecured Creditors Committee and Ad Hoc Committee to reach a deal", while the Winklevoss brothers haven't been "involved in any of the recent in-person meetings".

In response, Cameron Winklevoss said, "of course you don't want us at the recent mediation sessions. We want a real deal with real value, and we are not fooled by your fraud and fake proposals. But you can keep trying to delay and mislead the UCC and the Ad Hoc Group to worm your way out."

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