DCG asks court to dismiss Gemini's 'PR campaign wrapped in lawsuit'

Quick Take

  • Digital Currency Group filed a motion seeking the dismissal of crypto exchange Gemini’s lawsuit against the firm and its founder Barry Silbert.

Digital Currency Group filed a motion seeking the dismissal of crypto exchange Gemini's lawsuit against the firm and its founder Barry Silbert, describing the July suit as "a continuation of the Winklevoss's year-long Twitter-based character assassination."

Gemini, which was founded by twin brothers Cameron and Tyler Winklevoss, sued Silbert and DCG over the money DCG-subsidiary Genesis owes the crypto exchange's clients. Prior to the credit crisis that swept crypto in 2022, Genesis and Gemini entered into a business relationship in which the latter firm provided its Earn clients' funds to the former firm to generate a yield. That provided Gemini clients with a juicy yield until Genesis paused withdrawals and stopped processing redemption requests in the wake of FTX's bankruptcy.

Genesis's lending unit filed for bankruptcy protection at the beginning of the year, and about $1.2 billion worth of Gemini client funds are stuck in limbo.

Gemini filed a lawsuit on July 7 in which it accused Silbert as being the "architect" and "mastermind" behind a fraud against Genesis's creditors, claiming that Silbert was directly involved in misleading creditors about the state of Genesis's financial status leading up to its meltdown. In the motion filed Thursday in the U.S. Southern District of New York, DCG said those claims are baseless.

A spokesperson added in a message to The Block that Gemini and its principles, Cameron and Tyler Winklevoss, are engaged in a "PR campaign wrapped in a lawsuit."

The motion notes that DCG and Silbert were not involved in Genesis's operations and did not have "any substantive involvement with the Gemini Earn program."

'Personal, vicious, and false'

"These tweets were personal, vicious, and false, accusing Silbert of 'foster[ing] and architect[ing] a culture of lies and deceit' and describing a letter by Silbert as 'another piece of carefully crafted stupidity,'" the motion states. "This Complaint is a continuation of that public relations campaign."

THE SCOOP