Gemini’s Cameron Winklevoss slams DCG for denying involvement in failed Earn program
Winklevoss says that DCG's denials are in fact a "direct admission" of involvement.
On Twitter, Winklevoss said:
“[DCG’s] response [to Gemini’s lawsuit] … is filled with carefully crafted statements that are incredibly revealing … It completely ignores the reality of the situation in a comical way.”
Gemini once offered its Earn product in partnership with Genesis, a subsidiary of DCG. Genesis halted withdrawals in November 2022 and later filed for bankruptcy; Gemini also halted Earn withdrawals in November as a result of the broader Genesis halt.
Later, in July 2023, Gemini filed a lawsuit against DCG and its CEO Barry Silbert alleging that the Earn offer was built on fraud and deception. On Aug. 10, DCG filed a response to Gemini in which it accused Gemini of attempting to avoid responsibility for the failure of Earn. DCG’s latest filing also serves as a motion to dismiss Genesis’ case.
Now, Winklevoss has contested several statements within DCG’s filing and motion to dismiss. On Aug. 11, Winklevoss highlighted DCG’s claim that it “had virtually nothing to do with the Gemini Earn program.” DCG argued in its latest filing that it and other Genesis affiliates were excluded from liability under earlier agreements around Earn.
Winklevoss argued that this denial — seemingly only a partial one — is in fact a “direct admission” that DCG played some role in the Gemini Earn program.
Gemini says DCG misrepresented $1.1B of finances
DCG also claimed that it had no duty to Gemini to correct statements that were made by its subsidiary, Genesis. Winklevoss contested that claim, writing:
“When a company you own [Genesis] says you [DCG] wrote a $1.1 billion dollar check that you know you didn’t write, yes, you have a duty to correct this.”
That statement concerns the fact that DCG owes $1.1 billion to Genesis to cover Genesis’ loan with the failed crypto firm Three Arrows Capital (3AC). This issue in part led Genesis to freeze withdrawals in November, which in turn led to a halt of Gemini Earn. Much of Gemini’s case revolves around the allegation that DCG did not accurately represent Genesis’ financial situation, including the status of the above loan.
Winklevoss concluded by alleging that DCG’s legal defenses were created “in a vacuum” and accused the company of attempting to evade responsibility. He reiterated that the two companies will go to court over the issue.
Gemini’s ongoing lawsuit against DCG is just one part of legal proceedings involving the two firms. Genesis is also engaged with its broader bankruptcy case, where it owes over $3.5 billion to creditors including Gemini and FTX.
The U.S. SEC also sued Gemini and Genesis over the failed Earn product in January. As of May, both companies sought for those charges to be dismissed. Various class action lawsuits related to the failed product are also underway.