Gemini, a crypto trust, sued Digital Currency Group Friday, alleging that the industry conglomerate, and its founder Barry Silbert, committed “fraud” by DCG subsidiary Genesis which held funds for Gemini linked to Earn, the latter’s company’s Earn program.

A filing to the New York County Supreme Court stated that the lawsuit was intended to recover Gemini’s funds from DCG. Gemini formed a partnership that allowed its customers up to 7.4% annual percentage yield. Gemini transferred its customers’ money to Genesis , which then lent it to companies such as the now-defunct Three Arrows Capital. CoinDesk, like Genesis, is a DCG subsidiary.

The filing stated that “Genesis, acting in concert with the Defendants with the active support and encouragement of the Defendants – encouraged the Gemini Earn Lenders by promoting Genesis’s purportedly rigorous risk-management practices as well as a supposedly thorough screening process of counterparties to whom it re-lent assets.” “Those were lies.”

The lawsuit claims that Silbert requested Gemini continue its Earn program despite the fact that he was “aware at the time Genesis was massively bankrupt” and that he took other measures to conceal Genesis’ billion-dollar hole in its balance sheet. Genesis declared bankruptcy in January 2023.

The filing criticized DCG for announcing that it had taken on the Three Arrows Capital loss, calling this “false.”

Genesis has not been honoring redemption requests since November, according to the filing.

In a Tweet Gemini cofounder Cameron Winklevoss referred to Silbert as “the architect and the mastermind of DCG and Genesis’ fraud against creditors”. He had previously invited Silbert on a Twitter Space where he would not have lawyers.

The lawsuit seeks damages, attorney fees, and “anyother relief that is deemed to be just and proper”.

DCG responded with a Tweet that called the claims “defamatory.” It also referred to the filing as a “publicity stunt.”

The tweet stated that “Senior DCG Leadership has been working round the clock for multiple months to actively negotiate with representatives of the Official Unsecured Creditors Committee (OUCC) and Ad Hoc Committee in order to reach a settlement while Gemini’s management was MIA [missing from action] or issuing only press statements.”

Both Gemini and Genesis are also facing a U.S. Securities and Exchange Commission lawsuit in relation to the Gemini Earn product. The lawsuit filed in January alleged that Gemini Earn is an unregistered security offering.

UPDATE (7 July 2023 at 15:45 UTC). Added additional details.

UPDATE (7 July, 16:05 UTC). adds DCG response.

UPDATE (7/7/16:25 UTC: Added context to SEC lawsuit.