Digital asset firm Gemini, one of the largest creditors of bankrupt virtual currency lending platform Genesis, has reportedly sued parent firm Digital Currency Group (DCG) and its CEO. This update has been announced the day after DCG missed the crypto exchange’s deadline for agreeing to a restructuring process for the VC firm’s troubled division.
DCG and Gemini, two major businesses in the crypto-assets sector, have argued many times during the last few months after the collapse of Genesis, which filed for bankruptcy back in January 2023.
The lawsuit states that DCG and its Chief Executive Officer Barry Silbert had intentionally misrepresented the accounting treatment of various liabilities that DCG allegedly assumed from Genesis as a result of losses Genesis incurred from the demise of Singapore-headquartered crypto-asset hedge fund Three Arrows Capital back in June of last year.
In a media statement, a DCG representative stated that it now expects to soon bring the Genesis bankruptcy case to a conclusive end.
The rep stated:
“Any suggestion of wrongdoing by DCG or any of its employees is baseless, defamatory, and completely false. From day one, DCG has remained committed to reaching an amicable solution for all parties to the Genesis bankruptcy.”
The ongoing dispute between Gemini and DCG intensified earlier this past week when Gemini provided a deadline for DCG to commit to a restructuring process by Thursday (July 6, 2023) afternoon.
Gemini’s co-founder Cameron Winklevoss had stated that following that deadline, his firm will file a lawsuit against DCG and CEO Barry Silbert.
While the lending division of Genesis had specified a plan to exit bankruptcy by May 2023, it has not yet made any agreement on a restructuring process with creditors, to whom it reportedly owes over $3 billion. This, according to court filings.
Gemini hopes to recover over $1.1 billion from Genesis.