Gemini Slaps Lawsuit on DCG & Barry Silbert On Charges of Fraud
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.
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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.