Saturday, June 22, 2024

Gemini, US Crypto Exchange, Sues DCG Over Gemini Earn Dispute

Gemini, the US-based crypto exchange, initiates legal action against the parent company of Genesis, a bankrupt crypto broker, regarding the disputed Gemini Earn program. The exchange alleges that high-ranking executives of the lending company provided misleading information to creditors. As per a recent Reuters report, Digital Currency Group (DCG) is being sued by Gemini.

In a comprehensive Twitter thread, Cameron Winklevoss, co-founder of Gemini, reveals that the exchange has filed a lawsuit against DCG and its CEO, Barry Silbert. Winklevoss accuses Silbert of personally orchestrating a fraudulent scheme against creditors. Apparently, after Gemini decided to terminate the Earn program, Silbert approached the exchange, urging them to continue it, despite knowing that Genesis was in a dire financial state.

The Earn program was a collaborative effort between Gemini and Genesis, offering retail investors the opportunity to lend their digital assets and earn interest. However, when Genesis declared bankruptcy, it left participants in the program owed a staggering $735 million.

Winklevoss discloses, “When Gemini notified Genesis of the termination of the Earn program in October 2022, Barry reached out to arrange a meeting, pressuring Gemini to keep Earn running. He did this despite being fully aware of Genesis’s massive insolvency. Barry claimed that Genesis only faced a timing issue—an outright lie meant to conceal the glaring hole in Genesis’s balance sheet.”

The situation further worsened when Three Arrows Capital (3AC) collapsed in June 2022, causing a $1.2 billion deficit in Genesis’s balance sheet. Instead of being transparent, Genesis attempted to mask the problem, assuring that everything was business as usual because DCG had absorbed the losses. Winklevoss asserts that this was a meticulously fabricated lie.

Winklevoss further alleges that DCG, Silbert, other executives, and Genesis collaborated to produce falsified financial reports, deceiving creditors and perpetuating the façade of financial stability. “Barry, DCG, and Genesis conspired to create false financial reports to conceal the truth from Gemini and creditors. One report deceitfully classified a phony 10-YEAR promissory note as a ‘Current Asset.’ This was a complete misrepresentation and an outright lie. Another falsified balance sheet claimed the note was a ‘receivable’ with a value of $1.1 billion. Yet another lie.”

Gemini previously stated in May that Genesis had defaulted on a $630 million debt payment, even after both parties entered into a 30-day mediation period.

Read Also: Creditcoin Releases 2.0+ Incentivized Testnet

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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