UPDATE: Gemini Files Legal Statement Against Barry Silbert’s DCG

September 16, 2023 11:37 am Comments

The battle between Gemini and the Digital Currency Group (DCG) continues to heat up.

After a tentative deal between DCG and creditors broke down late last month Gemini escalated the legal battle and issued a new statement to the court that you can read in its entirety here.

According to that statement, Gemini outright accused Barry Silbert’s DCG of fraud. The statement cited irresponsible business practices such as DCG continuing to take out substantial loans instead of paying down its debt.

Bitcoin News provided an excerpt from the recent court filing: “DCG borrowed huge amounts of Bitcoin from Genesis after the 3AC collapse, rather than inject any real value into Genesis.”

In a related report, CoinDesk provided this update: “Digital Currency Group and Genesis’ proposed bankruptcy recovery plan would not make Gemini users “nearly whole,” the exchange said Friday.”

News BTC dissected the court documents:

Gemini also highlights that DCG is now unwilling to repay the more than $630 million it borrowed from the company, which was due several months ago in May.

Gemini argues that DCG has attempted to “wear down” creditors over the past ten months, hoping they would settle for a significant reduction in the amount owed.

This Bloomberg Crypto article indicates that DCG is desperate for creditors to accept the repayment plan. Bloomberg Crypto explained: “Barry Silbert’s Digital Currency Group is urging creditors of its bankrupt crypto lending subsidiary, Genesis Global Holdco, to back a proposed repayment plan.”

Previously, Gemini co-founder Cameron Winklevoss levied these accusations against Barry Silbert and DCG:

“Last month, Gemini filed a lawsuit against DCG and Barry Silbert for masterminding the DCG and Genesis fraud perpetrated against creditors, including Earn users. Their response filed yesterday, is filled with carefully crafted statements that are incredibly revealing.

For example, they claim they “had virtually nothing to do with the Gemini Earn program.” This is a direct admission that they did in fact have something to do with the Gemini Earn program. Lol.

They also claim that they “owed no duty to Gemini to correct the allegedly false misstatements of [Genesis].” You’ve got to be kidding me. When a company you own says you wrote a $1.1 billion dollar check that you know you didn’t write, yes, you have a duty to correct this. Sorry, but this doesn’t even pass the giggle test.

TBH, this is a brief written by a law school student conjuring up technical legal defenses in a vacuum.

It completely ignores the reality of the situation in a comical way. But to be fair, it is in line with Barry’s playbook of refusing to take responsibility, playing the dumb, and trying to get out of anything and everything on a technicality. Good luck making these arguments to a jury of your peers. See you in court.”

Coin Telegraph added:

According to the legal team, DCG was attempting to “bait the Gemini Lenders into accepting a deal” that would allow the company to pay less than it allegedly owed. Lawyers called on the firm to “significantly improve the terms of the loans” provided to Genesis and not use Genesis’ bankruptcy proceedings as cover for justifications in the recovery plan.

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