Winklevoss’ Gemini exchange sues DCG Group and Barry Silbert in attempt to recover funds


  • Gemini exchange hit Digital Currency Group with a lawsuit alleging fraud. 
  • The DCG Group’s subsidiary Genesis held funds for Gemini’s Earn program and turned insolvent, failing to return customer assets. 
  • Winklevoss’ lawsuit alleges that founder Barry Silbert asked Gemini to continue with the program while aware of DCG’s insolvency.

Winklevoss twins’ Gemini Trust Co has filed a lawsuit against Digital Currency Group (DCG) Inc. and CEO Barry Silbert. Gemini alleges DCG of fraud and deception.

The two firms have been at loggerheads since DCG subsidiary Genesis failed to return funds of Gemini’s Earn program users. The lawsuit accuses Barry Silbert of being aware of DCG’s insolvency while it held funds for Earn.

Also read: Binance CEO CZ claims the exchange is not FTX, fights FUD among BNB holders

Gemini hits DCG group with lawsuit

After months of attempting to recover funds of Gemini’s Earn program, the exchange founded by the Winklevoss twins filed a lawsuit against Digital Currency Group and its CEO Barry Silbert.

The dispute between Gemini and DCG’s subsidiary Genesis stems from the former’s Earn program and failure of the latter to return user assets due to insolvency. On July 3, Cameron Winklevoss, one of the founders of Gemini, published a letter to Barry Silbert in an attempt to recover lost user funds from the Earn program.

DCG subsidiary Genesis owes $766 million to Gemini, and over $3.5 billion to its 50 largest creditors (including the exchange), according to the bankruptcy filing from January 2023.

The lawsuit alleges that “Genesis was recklessly lending huge amounts to a counterparty that Defendants knew was using these huge amounts to fuel a risky arbitrage trading strategy,” according to the filing.

Cameron Winklevoss informed his 719,100 followers that Gemini notified Genesis it would be terminating the Earn program in October 2022, while DCG CEO Barry reached out to set up a meeting to induce Gemini to continue Earn.

Winklevoss alleges Silbert of being aware of DCG’s insolvency when suggesting that Gemini continue its Earn program. Winklevoss explains that Silbert’s actions were an attempt to cover part of the $1.2 billion hole in Genesis’ balance sheet from June 2022, the collapse of Three Arrows Capital (3AC).

Winklevoss informed the crypto community that he believes that DCG CEO Barry, and subsidiary Genesis conspired to create false financial reports to hide the truth from Gemini and creditors. FXStreet reached out to DCG, but did not receive a response at the time of publication.


Like this article? Help us with some feedback by answering this survey:


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP