Digital Currency Group (DCG) and its CEO, Barry Silbert, have formally requested the dismissal of a $3 billion civil lawsuit filed by the New York Attorney General (NYAG). The lawsuit centers around allegations tied to a failed crypto lending program.
Labeling the accusations as “a thin web of baseless innuendo,” Silbert and DCG firmly assert their innocence and decry the claims as unfounded.
Barry Silbert Refutes Baseless Innuendo in NY Suit
The heart of the controversy lies in the now-defunct Gemini Earn program—a collaboration between DCG’s Genesis Global Capital unit and Gemini, a crypto exchange founded by the Winklevoss twins. According to the NYAG, DCG and Silbert misled customers about the program’s safety, jeopardizing investor funds amid the volatile crypto market of 2022.
However, DCG counters these allegations with a staunch defense, emphasizing the robust advisory backing its actions received.
“As we have stated from the beginning, the allegations are a thin web of baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements,” DCG highlighted in its motion to dismiss.
Read more: Who Is Barry Silbert, Founder of Digital Currency Group (DCG)?
They contend that their efforts were always aimed at supporting Genesis with the utmost integrity and based on advice from reputable accountants, investment bankers, and consultants.
In an interesting turn of events, in November 2023, DCG enlisted the expertise of Barry Berke, a high-profile attorney known for his role in former President Donald Trump’s impeachment trials. Berke’s involvement signifies DCG’s aggressive approach to contesting the NYAG’s allegations.
With a legal strategy that previously saw success in major political and financial cases, DCG aims to dismantle the NYAG’s case against them. Berke’s appointment follows the hiring of Donald B. Verrilli Jr., another legal heavyweight, highlighting DCG’s commitment to a formidable defense.
Upping the Ante
The NYAG’s suit initially sought $1.1 billion in October and was later amended to demand an additional $2 billion. It accuses Gemini and Genesis of not disclosing investment risks associated with Gemini Earn.
This program promised investors up to 8% interest by lending their crypto assets, which faced a dramatic downfall following the collapse of several major players in the crypto space, including Three Arrows Capital and FTX.
Read more: Gemini vs. Coinbase: Everything You Need To Know
Silbert’s motion further criticizes the lawsuit’s basis, pointing out the absence of any direct misrepresentations or involvement in the public statements regarding DCG’s financial obligations to Genesis.
“The documents underpinning the amended complaint reveal that at all times Mr. Silbert was laser focused on trying to support Genesis during the turmoil impacting the cryptocurrency markets in 2022,” the filing stated.
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