Crypto exchange Gemini is preparing to file a lawsuit against the parent company of Genesis Global Capital – Digital Currency Group (DCG) – and its head Barry Silbert, Cameron Winklevoss, one of the founders of Gemini, said.
“We are preparing to take direct legal action against Barry, DCG and others who are responsible for the fraud that harmed over 340,000 Earn (Gemini loan product) users and others defrauded by Genesis and its associates,” Winklevoss tweeted. (the social network is blocked in Russia).
Last November, $175 million of Genesis funds were frozen in FTX accounts, after which the crypto lender suspended the repayment of its obligations. In this regard, the partner of Genesis, the American crypto exchange Gemini, was forced to limit payments to customers using the special Gemini Earn program. Genesis owes $900 million to a group of these customers on the Gemini platform.
In late December, Gemini Earn users sued the Gemini exchange and its founders, twin brothers Tyler and Cameron Winklevoss. Investors accused the exchange of offering the Gemini Earn product, which was not registered as a security, although it should have been. In their opinion, if the product was properly registered, its users could more effectively assess the risks associated with it.
After that, Cameron Winklevoss accused Barry Silbert of trying to delay the return of $ 900 million to Gemini Earn customers and in an open letter called on the board to remove the DCG chief. Silbert, in turn, called Winklevoss’s accusations a publicity stunt.
While the conflict between the management of Gemini and Genesis began to gain momentum, last week a lawsuit was filed against both companies by the US Securities and Exchange Commission (SEC). The agency also accuses the crypto exchange and the crypto lender of offering unregistered securities in the form of the Gemini Earn product.
On January 19, Genesis filed for bankruptcy. The company has begun a business restructuring to address the issue of returning funds to creditors, the largest of which are Gemini clients. According to the statement, Genesis owes them $765 million.
Cameron Winklevoss notedthat this is an important step on the part of the crypto lender, however, according to him, the parent company Genesis is still refusing a “fair deal” to return funds to Gemini customers. The decision to bankrupt Genesis does nothing to relieve Silbert and DCG of liability, one of the twins said.
“If Barry and DCG do not come to their senses and make a fair offer to creditors, we will immediately file a lawsuit against Barry and DCG,” Winklevoss wrote.
6/ Unless Barry and DCG come to their senses and make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently.
— Cameron Winklevoss (@cameron) January 20, 2023
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