- The exchange is accusing Silbert of concealing Genesis’ insolvency.
- Silbert has, however, dismissed the complaint as a ”publicity stunt.”
The cryptocurrency exchange founded by the Winklevoss twin brothers, Gemini, has sued Genesis’ parent company DCG, and its CEO, Barry Silbert, for what it termed ‘fraud against creditors’. They filed the lawsuit on Friday before the supreme court of the state of New York.
Genesis is a cryptocurrency lending platform partnered with Gemini for a lending program dubbed Genesis Earn. The program offered users up to 8% interest rates for their deposits. Genesis filed for bankruptcy, suspending withdrawals and taking millions of investors’ funds.
The Winklevoss are now accusing DCG and Genesis of being behind the losses that investors suffered following the collapse. “Barry was not only the architect and mastermind of the DCG and Genesis fraud against creditors, but he was also directly and personally involved in perpetrating it,” Cameron Winklevoss wrote in a Twitter thread on Friday.
Additionally, Gemini is accusing Silbert of allegedly urging the exchange to continue with the Earn program despite being aware of the insolvency of the lending platform. When Gemini reportedly notified Genesis that it was terminating the program, the lawsuit stated that Silbert urged the exchange not to end it.
Further Accusations
The complaint further accused Genesis of hiding losses related to 3AC’s collapse. “When Three Arrows Capital (3AC) collapsed in June 2022, it blew a $1.2 billion hole in Geneisis’ balance sheet. Instead of coming clean, Genesis claimed that everything was business as usual because DCG had stepped in to absorb the losses,” Winklevoss added.
DCG said Gemini and the Winklevoss brothers were trying to shift the blame. Additionally, the company said it was working on an amicable solution to conclude the Chapter 11 bankruptcy filing.
The Distributed reported in January that the Securities and Exchange Commission (SEC) had sued Gemini and Genesis Global for allegedly offering unregistered securities through the Gemini Earn lending platform. The regulator further accused the platform of not offering investors sufficient information about the program.
