The co-founder of cryptocurrency exchange Gemini accused Digital Currency Group CEO Barry Silbert of “malicious distraction tactics”. Meanwhile, three Gemini Earn users filed a class action arbitration request against Genesis Global Capital and Digital Currency Group. Because Gemini suspended the Earn program due to Genesis freezing withdrawals. Here are the details…
Problems escalate between cryptocurrency exchange Gemini and DCG
Cameron Winklevoss has sent an open letter to crypto broker Genesis Global Capital and its parent company DCG. He criticized these two companies, claiming that Gemini owed their customers $900 million. The letter notes that Gemini has been waiting for news of a repayment agreement for six weeks. However, he claims that the company failed to produce results.
Earn Update: An Open Letter to @BarrySilbert pic.twitter.com/kouAviTho4
— Cameron Winklevoss (@cameron) January 2, 2023
On the other hand, Silbert said that DCG submitted a proposal to Genesis and Gemini’s advisors on December 29, 2022. However, he responded by tweeting that he did not receive any response. Winklevoss also accused DCG CEO Barry Silbert of using $1.67 billion. Winklevoss stated that DCG “owes” Genesis.
He claimed he used the money to help other DCG ventures rather than repay creditors. Silbert responded by tweeting that DCG “did not borrow $1.675 billion from Genesis.” Allegedly, DCG has $1.1 billion of securities related to liabilities from Genesis related to the Three Arrows Capital default. In November, Silbert wrote to shareholders that DCG owed roughly $575 million to Genesis Global due this May.
Gemini Earn-Genesis-FTX confusion
cryptocoin.com As we reported, Gemini, co-owned by Cameron Winklevoss and his twin brother Tyler, stopped redemptions on an interest-bearing product called Earn in mid-November, a week after rival crypto exchange FTX filed for bankruptcy. The product offered investors opportunities to earn up to 8 percent interest on their crypto by lending these tokens to Genesis.
Gemini’s redemption pause came just after Genesis announced that it had locked around $175 million in the now-bankrupt FTX platform. Genesis stopped withdrawals when FTX filed for bankruptcy. Suspended new credit creation. Since then, Genesis’s creditors have been working with restructuring attorneys to avoid bankruptcy.
Users of the cryptocurrency exchange filed a class action lawsuit
Meanwhile, three Gemini Earn users have filed a lawsuit. The plaintiffs allege that Genesis failed to return their and all Gemini Earn users’ crypto assets as required pursuant to the main agreements between the firm and users. They claim that Genesis first violated the Master Agreement when the firm went bankrupt in the summer of 2022, but hid its bankruptcy status from its customers.
They then allege that Genesis made a fraudulent transaction with parent company DCG to hide bankruptcy and traded the right to collect $2.3 billion in debt owed to Genesis by the now-bankrupt hedge fund Three Arrows Capital for a promissory note. . The group also claims that Genesis’ Master Agreement effectively creates unregistered sales of securities and seeks to terminate sales contracts and related losses.
There is also a concurrent class action lawsuit filed at the end of December by investors Brendan Picha and Max J. Hastings against Gemini for allegedly selling unregistered securities through the exchange’s Earnings program. Following this development, Gemini’s co-founder Cameron Winklevoss and DCG CEO Barry Silbert gave the speeches we mentioned above.
