- The charges involve lender Genesis and the Earn program
- Barry Silbert is accused of fraud while trying to renew the Earn program
- On July 4, Cameron Winklevoss warned he could file suit
American cryptocurrency exchange Gemini, led by Cameron Winklevoss, has sued Digital Currency Group Holdings and its CEO Barry Silbert, accusing them of defrauding creditors.
In a statement filed in a New York court on July 7, Gemini alleges that DCG and Silbert participated in a scheme that involved lending huge amounts of cryptocurrency and U.S. dollars to Genesis. Exchange seeks to recover funds that were lost due to false, manipulative, incomplete statements by DCG and Silbert. In addition, the company plans to pursue legal options in the Genesis bankruptcy case.
A report from Cameron Winklevoss stated that Silbert had information about the lender’s insolvency, but still tried to continue the Earn. The complaint included allegations of false financial reporting that began with the June 2022 collapse of Three Arrows Capital, which led to a deficit in the balance sheet. In addition, the Winklevoss brothers claim that Genesis and DCG owed Gemini customers $900 million.
“DCG, Genesis and Barry conspired to create false financial statements in order to hide the truth from Gemini and creditors. This fraudulent activity has reached its highest level. Silbert and other executives were directly involved in this deception, lying over and over again,” Cameron said.
On July 4, Winklevoss published an open letter threatening the DCG founder with legal action if the conglomerate did not repay its $1.46 billion debt to the exchange and its customers.