Gemini sues Digital Currency Group and Barry Silbert over Genesis and Earn program.

United States-based cryptocurrency exchange Gemini has announced legal action against the conglomerate Digital Currency Group (DCG) and its CEO, Barry Silbert, claiming “fraud against creditors.”

In a July 7 filing in a New York court, Gemini alleged DCG and Silbert engaged in a scheme involving lending “huge amounts of cryptocurrency and U.S. dollars” to Genesis. According to the filing, Gemini seeks to recover funds incurred 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,” adding the firm would also pursue legal avenues in Genesis’ bankruptcy case.

Genesis, a DCG subsidiary, had been the crypto lender responsible for operating an Earn program in partnership with Gemini, which launched in 2021. The program claimed Gemini users could loan crypto to Genesis with the promise the firm would repay it with interest. However, the firm halted withdrawals in November 2022, citing “unprecedented market turmoil” and subsequently filed for Chapter 11 bankruptcy.

According to a July 7 Twitter thread from Gemini co-founder Cameron Winklevoss, Silbert knew Genesis was “massively insolvent” when attempting to continue the Earn program. The complaint included alleged false financial reporting from DCG and Silbert starting with the collapse of Three Arrows Capital in June 2022, which “blew a $1.2 billion hole in Genesis’s balance sheet.” Winklevoss has claimed that Genesis and DCG owe $900 million to Gemini’s clients.

“Barry, DCG, and Genesis all conspired to create false financial reports to hide the truth from Gemini and creditors,” claimed Winklevoss. “This fraud goes to the very top. Barry Silbert and other DCG executives were directly involved in these lies and they lied again and again to conceal the truth from Gemini and other creditors.”

1/ Today, @Gemini filed a lawsuit against @DCGco and @BarrySilbert personally in New York court. Barry was not only the architect and mastermind of the DCG and Genesis fraud against creditors, he was directly and personally involved in perpetrating it.

— Cameron Winklevoss (@cameron) July 7, 2023

Related: Gemini and Genesis’ legal troubles stand to shake up industry further

Winklevoss had made repeated threats to sue DCG and Silbert over delays in resolving the issues between Gemini and Genesis, most recently issuing an open letter to the CEO proposing a “best and final offer” of $1.47 billion by 2028. In a July 7 response on Twitter, DCG said the lawsuit was a “publicity stunt” by Winklevoss and any claims of wrongdoing were “baseless, defamatory, and completely false.”

The fallout of the Earn program made both Genesis and Gemini targets of federal and state regulators. The U.S. Securities and Exchange Commission filed a suit against the two firms in January for allegedly offering unregistered securities, and New York’s Department of Financial Services was reportedly investigating Gemini over claims in its Earn program.

Magazine: Genesis files for bankruptcy, FTX explores a reboot, and Bitzlato news: Hodler’s Digest, Jan. 15-21

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!


Was this article helpful?

93 out of 132 found this helpful

Discover more


Core Scientific, a Bitcoin miner, files Chapter 11 plan.

The Bitcoin mining company, Core Scientific, which has run out of money, has submitted a plan under Chapter 11 of the...


Prepare for Bitcoin’s Santa Claus Rally!

Fashionista, get ready for a potential $56,000 surge in Bitcoin by the end of 2021, as history shows bullish momentum...


Analysts ‘increasingly confident’ of a spot Bitcoin ETF approval

Breaking Crypto news roundup - What happened in the world of crypto over the weekend?


El Salvador's Bitcoin Frenzy Turns into Profit Bonanza

Bitcoin holdings in the country have skyrocketed to $131 million.


Coinbase Laughs in the Face of $5,000-Per-Week Bitcoin Withdrawal Limit Rumors

Fashionista, get ready to breathe a sigh of relief! Coinbase has just debunked rumors of imposing withdrawal limits f...


Matrixport Six Predictions for the Cryptocurrency Market in the First Half of 2024

The summary includes the approval of a January US SEC Bitcoin ETF, the possibility of Circle going public in April, t...