Gemini Files Lawsuit Against Digital Currency Group and CEO Over Failed Restructuring Agreement with Genesis
Gemini, a prominent cryptocurrency exchange and the primary creditor of bankrupt crypto lending firm Genesis, has taken legal action by filing a lawsuit against Digital Currency Group (DCG), the parent company, and its CEO. The lawsuit stems from DCG's failure to meet Gemini's deadline for a restructuring agreement regarding the troubled unit of their venture capital firm.
Genesis, which filed for bankruptcy in January, has been a source of conflicts between DCG and Gemini in recent months. According to the lawsuit, DCG and its CEO, Barry Silbert, are accused of misrepresenting the accounting treatment of specific liabilities that DCG assumed from Genesis, resulting from losses incurred due to the collapse of Singapore-based crypto hedge fund Three Arrows Capital in June 2022.
Responding to the lawsuit, a spokesperson for DCG expressed their expectation of resolving the Genesis bankruptcy case soon. They strongly refuted any allegations of misconduct, defamation, or falsehood, underscoring their dedication to finding a mutually agreeable solution for all parties involved in the Genesis bankruptcy proceedings.
The dispute between Gemini and DCG escalated when Gemini set a deadline for DCG to agree to a restructuring deal by Thursday afternoon. Cameron Winklevoss, co-founder of Gemini, had previously stated that if the deadline passed without an agreement, legal action would be taken against DCG and Silbert.
Although Genesis's lending unit initially aimed to emerge from bankruptcy by May, it has yet to reach a consensus on a restructuring plan with its creditors, to whom it owes over $3 billion, as per court filings. In the lawsuit, Gemini seeks to recover more than $1.1 billion from Genesis.