Gemini

Cryptocurrency

Future

United

Cryptocurrency exchange Gemini, based in the United States, has taken legal action against Digital Currency Group (DCG) and its CEO, Barry Silbert, accusing them of “fraud against creditors.” 
In a filing made on July 7 in a New York court, Gemini claimed that DCG and Silbert were involved in a scheme where they lent large amounts of cryptocurrency and U.S. dollars to Genesis, a subsidiary of DCG. 
Gemini seeks to recover funds it incurred due to alleged false representations and omissions by DCG and Silbert, as well as their alleged role in facilitating Genesis’s fraud against Gemini. 
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The exchange also intends to pursue legal avenues in Genesis’s bankruptcy case. 
Genesis had been responsible for operating an Earn program in partnership with Gemini, allowing users to loan crypto with the promise of repayment and interest. 
However, the program suspended withdrawals in November 2022, citing market turmoil, and subsequently filed for Chapter 11 bankruptcy. 
Gemini co-founder Cameron Winklevoss, in a Twitter thread on July 7, claimed that Silbert was aware of Genesis’s insolvency when attempting to continue the Earn program. 
The complaint further alleged false financial reporting by DCG and Silbert, starting with the collapse of Three Arrows Capital in June 2022, which resulted in a significant deficit in Genesis’s balance sheet. 
Winklevoss asserted that Genesis and DCG owed $900 million to Gemini’s clients. 
Winklevoss accused Silbert and other DCG executives of conspiring to create false financial reports to deceive Gemini and creditors, stating, “This fraud goes to the very top.” 
Winklevoss had previously threatened to sue DCG and Silbert over delays in resolving the issues between Gemini and Genesis. 
In response to the lawsuit, DCG called the legal action a “publicity stunt” by Winklevoss and dismissed claims of wrongdoing as “baseless, defamatory, and completely false.” 
Both Genesis and Gemini have faced regulatory scrutiny following the fallout of the Earn program. 
The U.S. Securities and Exchange Commission filed a lawsuit against the two firms in January, alleging the offering of unregistered securities. 
Additionally, the New York Department of Financial Services reportedly initiated an investigation into Gemini regarding claims related to its Earn program. 
<a href="https://www.cryptointelligence.co.uk/category/news/">Crypto News Today</a>

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