On Friday, Gemini filed a lawsuit against major crypto conglomerate DCG and its CEO Barry Silbert, alleging that the latter was the “architect and mastermind” of the firm’s “fraud” against creditors.
DCG responded in a statement posted to Twitter, calling the lawsuit “another publicity stunt” from Gemini founder Cameron Winklevoss in order to shift the blame from himself and Gemini.
DCG Statement: pic.twitter.com/Mz9EMTPgLT
— Digital Currency Group (@DCGco) July 7, 2023
DCG claimed that while they were continuously working on a resolution plan, Gemini’s leadership was either missing in action or issuing press statements.
“To be clear, neither Cameron nor Tyler Winklevoss have been involved in any of the recent in-person meetings,” said DCG.
Gemini has been working with DCG and creditor groups on a resolution plan for DCG’s crypto lending subsidiary Genesis, which filed for Chapter 11 bankruptcy in January. Gemini is one of the firm’s largest creditors and is seeking to recoup over $1.12 billion from Genesis for users of the Gemini Earn program.
Although the parties appeared to have worked out an agreement that would have seen Genesis exit bankruptcy in May, things took a turn when some creditors reneged on the initial terms. According to an update from Gemini, the creditors’ demands for revised terms came after an investigation into the intercompany loans between DCG and Genesis before the latter halted.
Then, early last week, Winklevoss presented Silbert with an ultimatum in an open letter shared on Twitter, asking him to accept the terms proposed by July 6 or face legal action from Gemini.
When the letter was met with no response, Gemini filed a lawsuit alleging two counts of fraud-related charges against DCG and Silbert. The 33-page complaint lists detailed accounts of DCG’s alleged fraud and Silbert’s role in orchestrating it.
DCG’s dismissive response to the allegations did not inspire confidence in many industry watchers, some of whom opined that the case against DCG appeared compelling on the surface.
During my diligence on the market contagion in November, other Genesis creditors shared stories and materials with me that matched and corroborated @cameron’s claims in the Gemini complaint. Nothing further to add.
— Ryan Selkis 🪳 (@twobitidiot) July 7, 2023