Breaking: DCG Files Motion to Dismiss Gemini Lawsuit

Crypto venture firm Digital Currency Group (DCG) has filed a motion requesting the dismissal of the lawsuit levied against the company and its founder Barry Silbert by the Winklevoss brothers’ cryptocurrency exchange Gemini. 

The Gemini DCG Legal Showdown

According to DCG’s legal team, the lawsuit is “a continuation of the Winklevoss’s year-long Twitter-based character assassination.” 

The crypto conglomerate argued that the lawsuit has no substantial evidence to prove that DCG was aware of the alleged fraud perpetrated by Genesis. Per the filed motion, “there are no well-pled allegations that Defendants had actual knowledge of any alleged fraud, and Gemini does no more than rely on Defendants’ corporate relationship with Genesis to argue otherwise.”

On Friday, July 7th, Gemini co-founder Cameron Winklevoss announced that his company had filed a lawsuit against DCG and its CEO on the grounds of fraud against its creditors and failure to return their funds. This was after Winklevoss put forward the final offer to DCG earlier that week to return over $1 billion on its customers’ funds. 

The individual lawsuit against Silbert stated that he is the “architect” and “mastermind” behind the fraud against Genesis’s creditors. He was blamed for making false and misleading statements about the financial health of the organization during the time leading to its meltdown. In the latest motion filed by DCG, these accusations were regarded as baseless.

“These tweets were personal, vicious, and false, accusing Silbert of ‘foster[ing] and architect[ing] a culture of lies and deceit’ and describing a letter by Silbert as ‘another piece of carefully crafted stupidity,'” the motion states.

The Foundation of the Brawl: Genesis Bankruptcy

DCG-subsidiary Genesis and Gemini had been in business together where the latter provided its Earn client’s fund to the former to produce a yield. 

However, chaos hit the entire cryptocurrency industry in 2022 and led many crypto entities to insolvency and bankruptcy. Genesis suffered a severe blow and was forced to suspend withdrawal on its platform. The crypto lender also stopped processing redemption requests around the time when FTX hit rock bottom.

In no distant time, the lending unit of Genesis filed for Chapter 11 bankruptcy protection against investors, and this trapped $1.2 billion worth of Gemini client funds.