Digital Currency Group Moves Motion to Dismiss Gemini Lawsuit, Calls It PR Campaign
On Thursday, August 10, cryptocurrency venture capital giant Digital Currency Group moved a motion to dismiss the lawsuit from crypto exchange Gemini which accuses Genesis of conducting fraud in the Earn program.
In a filing dated August 10th with the United States District Court for the Southern District of New York, attorneys representing DCG and its CEO, Barry Silbert, alleged that Gemini's lawsuit filed in July was a continuation of a PR campaign aimed at the firm.
The filing further claims that Gemini had targeted DCG through social media with unfounded and malicious claims. This filing echoed Gemini's own complaint, which aimed to recoup funds due to alleged misrepresentations by DCG and Silbert, as well as their involvement in facilitating alleged fraud against Gemini by Genesis.
As per the filing submitted by DCG, Silbert and the firm “had virtually nothing to do with the Gemini Earn program”. Furthermore, they noted that Gemini hasn’t provided enough evidence for its allegations of fraudulent activities.
“[T]he Complaint is a hodgepodge of conclusory allegations against non-defendant Genesis, all belied by the fact that Gemini has not filed these spectacular claims in the Genesis bankruptcy,” noted DCG.
Genesis, a subsidiary of DCG, had managed a crypto lending program called Earn, launched in 2021 in collaboration with Gemini. This program allowed Gemini users to lend crypto to Genesis, with the assurance of repayment with interest. However, in November 2022, Genesis ceased withdrawals due to market turbulence and later filed for Chapter 11 bankruptcy in January 2023.
Following the collapse of Three Arrows Capital in 2022, Genesis was reportedly left with $1.2 billion in uncertain funds due to bankruptcy proceedings. Gemini's co-founders, Cameron and Tyler Winklevoss, asserted that Genesis and DCG owed $900 million to the exchange's clients.
In the latest filing, the Digital Currency Group said: “The lawsuit is a baseless continuation of Cameron and Tyler Winklevoss’ year-long Twitter-based character assassination and public relations campaign to deflect blame from their own mismanagement. DCG looks forward to moving past this ridiculous lawsuit as we continue working towards our mission of accelerating the development of a better financial system".
Gemini and Genesis are currently confronting a civil lawsuit initiated by the U.S. Securities and Exchange Commission in January concerning their Earn program. The regulatory body alleges that the program involved the sale of unregistered securities. Additionally, the New York State Department of Financial Services is said to be conducting an investigation into the exchange for parallel accusations.