Neither Silbert nor DCG responded, prompting Cameron to invite Silbert to a Twitter Space to discuss the proposal a day later. He warned Genesis and Silbert of a potential legal lawsuit if the company didn’t accept the offer. Gemini filed the lawsuit a few days after Cameron, one of Gemini’s co-founders, shared an open letter via his Twitter handle to Silbert extending a final offer for the restructuring of the DCG loan. In addition, Gemini claims that Silbert knew the troubles facing Genesis were deeply rooted and couldn’t be resolved quickly. The lawsuit also claims that in October 2022, Silbert reached out to one of the Gemini founders, assuring them that it would only be a matter of time before their troubles were resolved. In the recently filed lawsuit, Gemini wants to recover losses and damages incurred directly from the false, incomplete, and misleading representations by both DCG and Silbert. In addition, DCG owes Genesis, its subsidiary, more than $1.65 billion and has defaulted on agreed payments. This money will help partly pay back the 232,000 Earn customers owed over $1.1 billion in assets. The move to file for bankruptcy by Genesis was preceded by the halting of the Earn service in November 2022, which led to the freezing of customer funds.Īs a major creditor in the ongoing bankruptcy case filed by Genesis, Gemini offered to put up $100 million towards Earn’s asset recovery efforts. Securities and Exchange Commission (SEC) sued the firm. The bankruptcy filing happened a few days before the U.S. However, after nearly two years of Earn being operational, Genesis filed for bankruptcy in January 2023 following the effects of the collapse of the crypto hedge fund Three Arrows Capital (3AC) and cryptocurrency exchange platform FTX. The service would see Gemini users lend out their coins and, in return, earn a yield using Genesis’ infrastructure. In February 2021, Gemini partnered with Genesis to enable its customers to earn an annual percentage yield of up to 7.4% on their deposits via a service known as Earn. The lawsuit comes after months of a long-standing public feud between the two firms after a collapsed lending venture. Gemini, which is owned by the Winklevoss twins - Cameron and Tyler Winklevoss - is accusing the US-based crypto firm and its CEO of fraud and deception. On July 7, Gemini, a US-based cryptocurrency exchange firm, filed a lawsuit at the New York County Supreme Court against Digital Currency Group (DCG) – Genesis’ parent company – alongside Barry Silbert, DCG’s CEO. Lawmakers have even gone as far as introducing a bill to have the SEC chair removed for abusing his power.īattle of the crypto billionaires: Winklevoss versus Silbert The SEC has been receiving heat over the past few weeks on what is seen as a witch hunt against crypto firms in the U.S. The legal suit came a day after the regulator sued Binance, another crypto exchange accused of operating an unregistered brokerage. ![]() Additionally, the regulator observed that Coinbase had publicly informed its shareholders that the assets on its exchange could be considered securities.Ībout a month ago, the SEC filed a lawsuit against Coinbase over claims that it was operating as an unregistered broker, clearing agency, and securities exchange. In its response, the SEC claims the crypto exchange was aware that it was contravening the country’s securities laws, which could pertain to its operations even before it was sued. ![]() Therefore, this leaves the SEC with no jurisdiction to sue it even if the allegations against it are genuine, according to Coinbase. Congress had the authority to regulate the cryptocurrency sector. In addition, Coinbase, in its counterattack, quoted a 2021 statement from Gary Gensler, the SEC’s Chair, saying only the U.S. The exchange also argued that the regulator approved its IPO in 2021 without classifying any of the cryptocurrencies on its platform as securities or needing it to register with the regulator. ![]() Coinbase, in the 177-page motion it filed nearly two weeks ago, stated that the SEC had no jurisdiction to prosecute it. On July 7, the SEC responded to Coinbase’s motion requesting the court to dismiss the lawsuit the U.S. To be continued: SEC pushes back at Coinbase
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