- Venture company Digital Currency Group (DCG) denies Gemini’s allegations.
- DCG lawyers have filed a motion in U.S. District Court.
- Gemini executives want to deflect blame for eliminating the Earn program, DCG officials say.
Venture company DCG wants to dismiss cryptocurrency exchange Gemini’s lawsuit over possible fraudulent activity. It called the charges a “PR campaign by the exchange” and filed a motion.
In an August 10, 2023, lawsuit filed in the U.S. District Court for the Southern District of New York, DCG lawyers called all of the charges “false and vicious”. They believe Gemini management wants to absolve themselves of responsibility for participating in the Earn program, through which customers earned interest on deposits. This program was launched in 2021 in partnership with DCG subsidiary Genesis.
under the terms of Earn, Gemini users could borrow Genesis assets. However, the firm blocked withdrawals in November 2022, citing “market turmoil”. It filed for bankruptcy in January 2023.
The DCG documents state that CEO Barry Silbert and his company “cannot be held responsible for the failure of a program that they had nothing to do with.”
“Gemini is trying to hold us responsible for the misrepresentation in various ways. However, all her attempts fail in terms of the law. Parent companies are not responsible for the actions of their subsidiaries,” DCG said.
Cryptocurrency exchange Gemini, founded by brothers Cameron and Tyler Winklevoss, previously accused DCG and Silbert of misrepresenting the liabilities of Genesis Global’s credit division. It is seeking more than $1.1 billion in damages.
The Earn program ceased operations in January 2023. Gemini co-founder Cameron Winklevoss posted an open letter on social media accusing the Genesis lender of delaying disbursement of funds. On July 7, 2023, a U.S. cryptocurrency exchange filed a formal lawsuit against Digital Currency Group, a holding company.
A U.S. cryptocurrency exchange has filed a formal lawsuit against Digital Currency Group.