Gemini, the cryptocurrency exchange founded by the wealthy Winklevoss brothers, has filed a legal complaint against Digital Currency Group (DCG) and its CEO and founder, Barry Silbert.

In a July 7 Twitter thread, Cameron Winklevoss of Gemini accused DCG and its CEO, Barry Silbert, of fraud and deception. According to Winklevoss, DCG and Silbert were involved in a scheme to hide Genesis’s insolvency and deceive creditors. DCG is the parent company of Genesis. 

Silbert Hid “Gaping Hole on Genesis’s Balance Sheet”

Cameron Winklevoss has previously threatened to sue Silbert and DCG over the repayment of a $900 million loan after Genesis filed for bankruptcy. Gemini had a close connection to Genesis, and steered investors to the platform, through its Gemini Earn division.

In the complaint, Winklevoss claimed that when Gemini decided to terminate its Earn program in October 2022, Silbert contacted Gemini to convince the exchange to continue the program. “He did those knowing Genesis was massively insolvent,” claimed Winklevoss.

Cameron Winklevoss is the CEO and co-founder, with his twin brother, of Gemini. Source: TechCrunch Disrupt NY 2015 – Day 3

Genesis, the lender, powered Gemini Exchange’s Earn program, offering depositors yields of up to 8%. Depositors entrusted their funds to Genesis, which then lent them out to generate interest for Gemini’s customers.

In reality, Genesis had a gaping financial hole caused by the collapse of Three Arrows Capital (3AC). Instead of being honest about the losses, Genesis and DCG came up with a ruse, according to the complaint.

DCG allegedly pretended it had absorbed the losses of Genesis, and provided a ten-year promissory note with a low-interest rate. Genesis told its creditors and depositors that its parent company, DCG, had “absorbed” 3AC losses.

“This was a carefully crafted lie,” said Winklevoss on Twitter.

DCG, Genesis “Conspired” Against Creditors

The complaint by Gemini alleges that the promissory note was simply an accounting trick. Designed to make it look as if the struggling company had positive equity. In doing so, Genesis appeared solvent without DCG actually having to provide the cash.

Winklevoss alleged that Genesis and DCG conspired to make false financial reports, misrepresenting the value of the promissory note. They allegedly then hid this from Gemini and other creditors. He further accused DCG executives, including Mark Murphy (then COO and current president), of being aware of the deception and not correcting the false reports.

The complaint provides multiple “falsified” balance sheets that appear to show DCG and Genesis attempting to hide their financial distress. According to Winklevoss, this fraud involves the “direct participation” and cooperation of Barry Silbert, DCG, and Genesis.

DCG hit back on Twitter within hours, calling the legal action “yet another publicity stunt… to deflect blame and responsibility.” The firm denied any suggestion of wrongdoing and confirmed it expected Genesis’s Chapter 11 bankruptcy proceedings to conclude soon.

In January, the SEC named Genesis and Gemini in a complaint accusing the pair of offering and selling unregistered securities through Gemini’s Earn program. In May, Gemini attempted to have the complaint thrown out, arguing it was beyond the regulator’s scope.

#REXBOX #GEMINI #NEWS #crypto2023

$SOL $BTC

Ripple has achieved a significant victory in its long-standing legal battle with the United States Securities and Exchange Commission (SEC). On July 13, 2023, Judge Analisa Torres ruled that XRP would not be classified as a security. This ruling completely changed the outlook for XRP and is considered a crucial milestone in the world of cryptocurrencies. Following the court decision, the U.S.-based crypto exchange Gemini hinted that it might relist XRP on its platform. Similarly, other major exchanges like Coinbase and Kraken have already relisted XRP.

Revival in the Crypto Market:

Judge Torres' decision has restored XRP trading on U.S. crypto exchanges to its previous state. This development led to a strong recovery in the crypto market and a rapid rise in the price of the XRP token. Crypto investors and the community were thrilled with Ripple's victory in the SEC lawsuit, leading to positive expectations for the future. #RippleSEC

Possible Move by Gemini:

Gemini's official Twitter account responded to questions about whether they would relist XRP with a "Thinking Face Emoji," sparking excitement within the community. If Gemini decides to relist XRP, it may increase the likelihood of other crypto exchanges making a similar move. The reintegration of XRP onto exchanges could contribute to a positive atmosphere in the crypto world.

Cameron Winklevoss' Sentiment:

Cameron Winklevoss, the co-founder, and CEO of Gemini, expressed his sentiment regarding the increase in the value of Bitcoin following Ripple's victory. This could signal the beginning of a significant upward trend in the crypto world and positively impact the value of other crypto assets in the market. #GEMINI

Possibility of Appeal:

However, the legal process is not yet fully complete. There is still a possibility that the SEC might appeal Judge Torres' decision. Bill Hughes, the lawyer for ConsenSys, the developer of the crypto wallet MetaMask, emphasizes the need for quick action if the federal regulatory agency decides to appeal. As a result, the crypto world continues to monitor how a potential appeal by the SEC could affect the market.

In Summary:

Ripple's victory in the SEC lawsuit is considered a milestone in the crypto world. The ruling that XRP is not a security has led crypto exchanges to resume XRP trading and caused a rapid increase in the token's price. In the future, as Gemini and other major exchanges list XRP again, this effect is expected to amplify. However, the possibility of an appeal by the SEC should also be considered, and developments in the crypto market need to be closely monitored. The full impact of this milestone will become clearer in the coming days. #SEC #XRP $XRP