YEREVAN (CoinChapter.com) – Clients of the infamously bankrupt Gemini Earn program have yet to receive the funds lost in the 3AC – Genesis – Gemini contagion wave. Thus, Cameron Winklevoss, the co-founder of Gemini, said he has been preparing to take “legal action” against the parent company Digital Currency Group (DCG) and its CEO Barry Silbert.
Before discussing the possible legal action, however, here is a blitz recap of why Genesis bankruptcy filing is crucial for Gemini Earn users.
Winklevoss vs. Silbert — What Happened?
Crypto lender Genesis filed for bankruptcy after months of insolvency issues. In detail, the company was hit hard by Terra’s collapse in May, which brought down Three Arrows Capital (3AC), a firm tied to Genesis.
Genesis also borrowed funds from Gemini and, after the 3AC implosion, could not pay them back, impacting Earn clients, who collectively lost millions. Moreover, Gemini and Genesis are sister companies and subsidiaries of crypto giant DCG.
Winklevoss called out DCG and Silbert personally for fraudulent accounting and putting personal gain ahead of client interests. He led Earn clients into a class action arbitration against DCG and Silbert, marking the first round of the Winklevoss vs. Silbert saga.
To be clear, this mess is entirely of your own making. [DCG] owes Genesis (its wholly owned subsidiary) ~$1.675 billion. This is money that Genesis owes to Earn users and other creditors. You took this money […] to fuel greedy share buybacks and kamikaze Grayscale NAV trades.
said Winklevoss in an open letter to Silbert.
Also read: DCG bankruptcy will hit harder than FTX.
Gemini will sue DCG and Silbert?
Meanwhile, the conflict is far from resolved, as Earn users still have to recover their funds. Thus, Winklevoss welcomed the Genesis insolvency news. He stated that the Genesis bankruptcy filing is a “crucial step towards us being able to recover your assets,” meaning Earn users.
The good news is that, by seeking the protection of the bankruptcy court, Genesis will be subject to judicial oversight and be required to provide discovery into the machinations that brought us to this point.
commented Winklevoss in a Twitter thread.
Moreover, Winklevoss mentioned that Gemini Earn users are preparing for legal action against DCG.
We have been preparing to take direct legal action against Barry, DCG, and others who share responsibility for the fraud that has caused harm to the 340,000+ Earn users and others duped by Genesis and its accomplices.
The Gemini executive did not let file the said lawsuit but said it is “imminent” unless Silbert and DCG “come to their senses.” The latter means Winklevoss expects Silbert to “make a fair offer” to thousands of Earn users, compensating their lost assets.
Notably, as CoinChapter reported earlier, both Gemini and Genesis are already facing lawsuits from the Securities and Exchange Commission (SEC). The agency found them in violation of US securities laws earlier this month. Thus, another reasonable question is, does Gemini have enough funds to simultaneously uphold two potentially lengthy legal actions?
As of Jan 20, Silbert has not commented on Winklevoss’ latest tweet.
Click here to keep up with the ever-changing crypto market and never miss the scoop!
