Gemini Accuses Digital Currency Group (DCG) of Scam
Gemini, the cryptocurrency exchange founded by brothers Tyler and Cameron Winklevoss, continues to accuse Barry Silbert’s Digital Currency Group (DCG) of scam.
Gemini’s Claim Against DCG
According to a court filing, filed on September 15, Gemini claimed that DCG is trying to avoid accountability for damage done on victims of product gain.
“DCG continues its work campaign of contrived, misleading and inaccurate assertions in an attempt to highlight creditors of Genesis ownership in general, Gemini lenders specifically, and escape responsibility for the damage it caused,” Gemini’s legal advisors, New York-based Hughes Hubbard & Reed LLP, said.
In response to these allegations, DCG developed a proposal that includes Genesis’ creditors, including Gemini, extending credit to DCG over several years. However, Gemini has made it clear that they will challenge this proposal and strongly support that DCG should fulfill its obligations by providing creditors with the agreed-upon amount.
Gemini’s Lawsuit and Demands
Gemini has also accused DCG of employing a strategy over the past ten months to wear down creditors and persuade them to accept a reduced amount. Gemini demands substantial improvements in the terms of loans extended by DCG if they intend to obtain the support of affected parties. Moreover, Gemini accuses DCG of taking responsibility for the insolvency of its subsidiaries and sacrificing both the stock exchange and its creditors to shield itself from responsibility.
Crypto Exchanges Face Regulatory Auditing
In January 2023, the US Securities and Exchange Commission (SEC) charged Genesis Global Capital LLC and Gemini Trust Company LLC for the unregistered offer and sale of securities for individual investors through the Gemini Earn crypto asset lending program, which later left investors in limbo. SEC alleges that Genesis and Gemini offered unregistered securities to the public, bypassing detection requirements designed to protect investors.
Through this unregistered offering, Genesis and Gemini made billions of dollars worth of encryption assets from hundreds of thousands of investors, promising high returns on deposits. However, Genesis later froze withdrawals, leaving Earn customers behind in a state of suspicion.
In June 2023, the Securities and Exchange Commission (SEC) also charged Coinbase for operating its encryption asset trading platform as an unregistered national stock exchange, broker, and clearing agency, as well as for not registering the offer and sale of its encryption asset staking as a service program.
Other central encryption trading places, including Changpeng Zhao’s Binance and Kraken, have also sparked outrage from the regulatory agency led by Gary Gensler in recent months.