DCG Asks for Gemini Lawsuit to be Tossed

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  • DCG has requested the dismissal of the lawsuit brought by Gemini, labeling it a “hodgepodge of conclusory allegations” 
  • Gemini’s lawsuit accuses DCG and CEO Barry Silbert of providing misleading information following Genesis’ bankruptcy filing
  • DCG’s counsel argued that the lawsuit’s claims primarily concern Genesis, not DCG or Silbert, due to their limited involvement in the Gemini Earn program

Digital Currency Group (DCG) has demanded that the judge overseeing its lawsuit against crypto exchange Gemini toss the case out, calling it a “hodgepodge of conclusory allegations.” Gemini is suing DCG due to its position as the parent company of Genesis Global Capital, which Gemini says owes it over one billion dollars. Gemini made a “final offer” to DCG but this wasn’t forthcoming, leading to the legal action last month. DCG has dismissed the validity of the case, saying that the issues should have been included in Genesis’ bankruptcy filings and that there is no proof of wrongdoing.

Lawsuit Alleges That Genesis Was Already Insolvent

Gemini filed its lawsuit against Gemini last month, with owners the Winklevoss twins accusing DCG and its CEO Barry Silbert of providing false and misleading information after Genesis filed for Chapter 11 bankruptcy.

The lawsuit alleges that Silbert concealed the fact that Genesis was insolvent from Gemini co-founders during a meeting and encouraged them to proceed with the Gemini Earn program which was halted in November last year when Genesis announced its insolvency, trapping $900 million in Gemini user funds on the platform.

Animosity Bodes Ill For Mediation

DCG and Silbert’s counsel stated that the Genesis lawsuit failed to adequately explain how Silbert’s presentation was fraudulent and argued that the allegations mainly concerned Genesis, not DCG or Silbert. They pointed out that Genesis was the primary partner of Gemini Earn, a service allowing customers to earn interest on crypto loans, and any claims related to Genesis should have been filed within its bankruptcy case.

The motion to dismiss also mentioned the Winklevoss twins’ Twitter-based criticisms and stated that DCG and Silbert had minimal involvement in the Gemini Earn program, asserting that they aren’t liable under the customer agreements with Gemini and Genesis.

Gemini users will hope that the two can come to an out of court settlement, but the level of animosity between the two camps suggests that this might be wishful thinking.