Crypto conglomerate DCG requested that the two lawsuits filed against them be consolidated to avoid troubles as many aspects of the suits coincide. Two separate class action lawsuits have been filed against the Digital Currency Group (DCG). The first case is regarding tricking investors with false statements, and the second argues if the group broke the securities rules made during its Initial Coin Offering (ICO).
DCG & CEO Barry Silbert request to consolidate 2 class action lawsuits 😮 ⚖️ Overlapping issues could spark efficiency, but might overlook critical differences! Stay tuned for future of crypto battles. 💼🚀 #cryptocurrency $DCGhttps://t.co/PaseLq7a2S pic.twitter.com/pBORQA2HZ6
— Chain Review (@Chain_Review) June 2, 2023
DCG Requesting For Case Consolidation
In a letter submitted to the United States District Judge Stefan Underhill in Connecticut, DCG argued that there are similarities between the cases’ legal and factual details. Also, both are nearly identical in the area of class designation. Moreover, the letter adds that the consolidation is to be done to avoid inconsistent rulings and the judicial process’s fluidity.
The defendants argue that it is done to minimize conflicts and maximize judicial effectiveness. They informed Underhill in the letter that a request was sent to U.S. District Judge Lewis Linman also requesting the transferring of the case from New York to Connecticut, notwithstanding the oppositions of the plaintiffs in the Nutmeg State.
The infamous bankruptcy case of Three Arrows Capital (3AC) was also heard in Connecticut. Furthermore, the complaint alleges that Barry Silbert orchestrated a fraudulent agreement to hide the signs of a collapse worth $1.1 Billion. DCG is also accused of securities fraud and misleading or false statements to investors.
DCG subsidiary Genesis and crypto exchange Gemini Trust participated in the mediation process for a month. They eventually reached an agreement in February 2023. But nothing was recorded formally. DCG further announced that it had to pay $630 Million to Gemini by the end of May 9, 2023.
The bankruptcy court was requested to extend the BTC lender Genesis Global Holdco’s mediation process with its creditors at least till June 16, 2023. The Securities and Exchange Commission (SEC) filed complaints against Gemini and Genesis, alleging them to be unregistered securities. Both crypto firms then filed a motion in court to dismiss the complaint.
Per the SEC’s January 2023 case in the New York Court, Gemini’s most profitable wing was offerings of unregistered services. Further claims by the financial watchdog allege that thousands of investors invested millions of dollars in the crypto assets generated by the accused companies.
It is easier to fight a massive war on a single front rather than fighting small battles spread across different battlefields. Barry might have had a similar mindset when he asked the court to merge the cases.
But, it would also help the adversaries as they now can fight as a united front. Moreover, this scenario shall speed up the resolution of the cases by facilitating more accessible discussions for a settlement. The community will closely monitor all the major parties in the lawsuit, including the plaintiffs and defendants.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/06/03/dcg-requests-case-merge-for-just-and-harmonious-results/