In an intriguing twist to the ongoing legal skirmish between Digital Currency Group (DCG) and Gemini, DCG has lodged a motion to dismiss Gemini’s lawsuit. The suit accuses DCG and its founder, Barry Silbert, of providing false information regarding the financial health of Genesis, a subsidiary of DCG, which administered funds for Gemini’s Earn program.
Gemini, led by the double-acting duo Cameron and Tyler Winklevoss, began legal proceedings on July 7. Their complaint attributes misleading data from DCG and Silbert as the catalyst for customers of Gemini Earn to stay enrolled in the lending scheme. The crux of the claim orbits the alleged concealment by DCG and Silbert of Genesis’s astronomical one-billion-dollar financial shortfall, a fallout of the previous year’s demise of crypto hedge fund, Three Arrows Capital.
In a counterpunch, DCG submitted a statement on August 10, proclaiming the absence of substantial evidence to back Gemini’s fraud allegations. The defense presented by DCG and Silbert hangs on the thesis that Gemini’s fraud charges are misconstrued, providing grounds for the dismissal of Gemini’s acrimonious claim. This viewpoint distinguishes the contentious Gemini Earn program, formerly operated in conjunction with Genesis Global Capital, LLC, as independent of DCG. A verbal duel on Twitter, orchestrated by the Winklevoss twins, seemed to attempt to transfer culpability onto DCG and Silbert.
Peering into the legal clash, it appears that Gemini concedes that its purported damages bore the imprint of external factors. These include the knocking down of FTX, deceit by Genesis, and maneuvers by third parties gunning for Gemini. One key linkage emerges from a 2022 agreement inked on November 10, wherein DCG offered collateral through Genesis for Gemini Earn lenders.
The upheaval in November 2022 accompanying FTX’s implosion provoked Genesis to reveal exposure, triggering a recall of loans by Gemini Earn lenders. This squeeze on liquidity spurred a halt on withdrawals on November 16, with Genesis imploding into Chapter 11 bankruptcy on January 19, 2023. Misconduct allegations arising from the lending relationship resulted in a countersuit by Gemini Earn lenders against Gemini.
Accusations that DCG abetted Genesis in floating fraudulent misrepresentations concerning Genesis’s fiscal status and DCG’s support underpin the July 7 complaint by Gemini and the Winklevoss twins. With DCG and Silbert slamming the accusation as a “publicity stunt,” and labeling it as “ridiculous,” they expressed intentions to advance their mission of bettering the financial system, given the lawsuit dismissal.
Digging deeper into the past reveals that prior to the legal slap, the Winklevoss twins were knocking on the doors of DCG and Silbert to recover $1.2 billion allegedly owed to the Earn program due to Genesis affiliations. This endless seesaw between Gemini and DCG raises critical questions for the crypto world, and could set lasting precedents for the broader digital currency universe.
Source: Cryptonews
