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Breaking: Gemini Files A Lawsuit Against Digital Currency Group and Barry Silbert for Fraud

Cameron Winklevoss noted that Genesis became insolvent just at the time of 3AC's collapse in June 2022, but deliberately chose not to disclose.
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Breaking: Gemini Files A Lawsuit Against Digital Currency Group and Barry Silbert for Fraud

Gemini co-founder Cameron Winklevoss has announced that they have filed a lawsuit against the Digital Currency Group (DCG) and its chief Barry Silbert in an individual capacity.

The lawsuit accused DCG and Silbert of committing fraud against the creditors and failing to return their funds. This development comes after Winklevoss put forward the final offer to DCG earlier this week for returning over $1 billion on its customers’ funds.

In its filing, Cameron Winklevoss explains that Gemini was willing to discontinue its Earn product back in October 2022. However, Silbert convinced them to continue with the product despite knowing that Genesis was “massively insolvent”.

The Winklevoss twin said that Barry Silbert lied despite major holes in Genesis’s balance sheet. The troubles for Genesis started during the blowup of Three Arrows Capital (3AC) in June 2022. In his revelation, Cameron writes:

When Three Arrows Capital (3AC) collapsed in June 2022, it blew a $1.2 billion hole in Genesis’s balance sheet. Instead of coming clean, Genesis claimed that everything was business as usual because DCG had stepped in to absorb the losses.

DCG Hand-In-Gloves With Genesis, Says Gemini

The Winklevoss twin explained that Barry Silbert has carefully crafted a lie. He also explains that DCG did not suffer any losses or provide actual capital. In secret, DCG issued a fake 10-year promissory note to Genesis with a very low 1% interest rate, which was worth only a small fraction of its stated value of $1.1 billion. Genesis was in severe financial trouble.

Barry, DCG, and Genesis collaborated to fabricate misleading financial reports, intentionally concealing the truth from Gemini and creditors. One of these reports falsely classified the fraudulent 10-year promissory note as a “Current Asset,” which was a complete lie and a deliberate misrepresentation of the situation, says Cameron.

“This fraud goes to the very top. Barry Silbert and other DCG executives were directly involved in these lies and they lied again and again to conceal the truth from Gemini and other creditors. DCG then-COO (and current President) directly lied when he told a creditor that DCG had absorbed the 3AC losses,” he writes.

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Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

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