Digital Foreign money Group and its CEO Barry Silbert have filed motions to dismiss a lawsuit introduced by New York Lawyer Common Letitia James.
The lawsuit alleges traders tied to the now-defunct Gemini Earn product and people with direct investments with DCG unit Genesis have been defrauded out of $3 billion.
Reasonably than take away cash from Genesis following the collapse of Three Arrows Capital and crypto change FTX, DCG contributed some $1.4 billion (at right now’s costs) into the stricken enterprise, the DCG submitting claims.
Digital Foreign money Group (DCG), the proprietor of bankrupt cryptocurrency lending operation Genesis International Capital, has filed a movement to dismiss New York Lawyer Common Letitia James’ lawsuit towards the companies.
DCG founder and CEO Barry Silbert additionally filed a movement on Wednesday to dismiss the Lawyer Common’s accusation that he hid losses on the companies and due to this fact cheated prospects and traders.
The New York lawsuit, filed in October of final 12 months and subsequently expanded final month, alleges traders tied to the now-defunct Gemini Earn product and people with direct investments with DCG unit Genesis had been defrauded out of $3 billion, attributable to DCG and others hiding losses incurred throughout the collapse of crypto companies resembling Three Arrows Capital (3AC) and FTX.
The crypto trade’s tangled mass of high-yield lending applications has principally vanished, with the largest and ugliest in all probability the partnership of Genesis and crypto change Gemini – owned by Tyler and Cameron Winklevoss – which has itself given rise to an acrimonious authorized battle.
“In the present day, DCG and Barry Silbert filed motions to dismiss the meritless civil criticism filed by the New York Lawyer Common towards Gemini, Genesis, and DCG. As we now have acknowledged from the start, the allegations are a skinny net of baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements,” DCG stated in an announcement.
The NYAG lawsuit alleges the businesses knew loans between them have been under-secured and extremely concentrated with FTX’s sister firm, Alameda Analysis, and that DCG and Silbert hid a gaping gap within the funds by means of a promissory be aware between the mother or father firm and Genesis.
DCG’s dismissal submitting factors to misinformation and hypothesis available in the market, which held that following the collapse of 3AC in 2022, DCG took cash out of Genesis. The alternative was true, DCG claims: Along with the promissory be aware, which DCG says is a completely vetted, totally binding doc the agency is dedicated to, some $1.4 billion of money and different property, at right now’s costs, have been contributed to Genesis after 3AC went down, in response to Wednesday’s submitting.
“DCG transferred a whole lot of thousands and thousands of {dollars} and property into Genesis at a time it had no obligation to take action,” a DCG spokeswoman stated through e-mail. “Actually, at right now’s costs, this equates to ~$1.4 billion in money and cash, representing ~30% of the present worth of the Genesis property. That is along with the $1.1 billion promissory be aware that continues to be misunderstood.”
DCG additionally contests allegations that the agency took an 18,000 bitcoin mortgage from Genesis after 3AC collapsed in June of 2022. This actually was an administrative repapering to consolidate prior mortgage agreements, DCG claims, and no new cash left Genesis for DCG.
“The allegations are inaccurate all through the criticism and they’re usually outright false,” the DCG spokeswoman stated.
Including an extra layer of complication, Genesis final month proposed a settlement take care of the New York lawyer common’s workplace, which mother or father firm DCG later objected to, calling the proposal “a back-door attempt to circumvent U.S. bankruptcy law.”