- The beef between Gemini co-founder Cameron Winklevoss and Digital Currency Group CEO Barry Silbert has gone legal
- Gemini sued the DCG on Friday over “fraud” regarding more than a billion dollars Gemini says it is owed
- DCG dismissed the claims as “baseless, defamatory, and completely false.”
The beef between Gemini co-founder Cameron Winklevoss and Digital Currency Group (DCG) CEO Barry Silbert has moved into the legal realm after Gemini sued DCG over an alleged fraud perpetrated by Silbert and which has prevented over a billion dollars from coming back to Gemini. Winklevoss outlined the case in a tweet thread on Friday, with Silbert replying just over an hour later with a statement from DCG which dismissed the lawsuit as a “publicity stunt” and said that the company concerned, Genesis, would be exiting bankruptcy protection soon.
War of Words Escalates
Earlier this year, Genesis was compelled to file for Chapter 11 bankruptcy due to the collapse of FTX, resulting in the loss of investors’ funds. Bankruptcy filings reveal that Genesis owes over $3 billion to its creditors, with $766 million of that amount owed to retail customers of the Winklevoss twins’ Gemini exchange. Gemini’s Earn program utilized Genesis’ lending platform, with Genesis loaning out the tokens to other companies. As a result of Genesis’ bankruptcy, the funds of approximately 340,000 Earn customers, around $900 million, were locked on the Genesis platform.
DCG, Genesis, and Gemini have been engaged in mediation proceedings through the bankruptcy court for several months, but the Winklevoss twins have grown increasingly critical of Silbert and his cryptocurrency companies. At the core of Gemini’s allegations against DCG and Silbert is a $1.2 billion promissory note, which they claim was misrepresented to creditors to conceal DCG and Genesis’ financial standing.
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
Silbert Denies Allegations
Gemini asserts that DCG and Silbert participated in a fraudulent scheme by deceiving Gemini’s customers into continuing to lend substantial amounts of cryptocurrency and US dollars to Genesis. They purportedly promoted robust risk-management practices and a rigorous vetting process for loan recipients, which, according to the lawsuit, turned out to be false.
Silbert responded to the lawsuit with a tweet that contained a short and dismissive statement from CDG denying the charges:
DCG Statement: pic.twitter.com/Mz9EMTPgLT
— Digital Currency Group (@DCGco) July 7, 2023
The statement called the lawsuit “yet another publicity stunt from Cameron Winklevoss to deflect blame and responsibility from himself and Gemini,” and called any suggestion of wrongdoing on DCG’s part ”baseless, defamatory, and completely false.” It added, “The mediation process is nearing a close and we expect to bring the Genesis Chapter 11 case to a conclusion soon.”
Whether this will result in any money coming back to Gemini remains to be seen, but that doesn’t seem likely at this point.