Connect with us

Hi, what are you looking for?

Business

Gemini sues its former partner, the bankrupt lender Genesis, for more than $1.6 billion in GBTC

According to the lawsuit, Genesis is refusing to provide further collateral transferred by DCG and instead wants to utilize the shares’ original value in claims.

On October 27th, Gemini, a cryptocurrency exchange, filed an adversary case in the Bankruptcy Court for the Southern District of New York against Genesis Global Holdco, a cryptocurrency lender that had filed for bankruptcy. The future of 62,086,586 GBTC (Grayscale Bitcoin Trust) shares is at stake. As part of the Gemini Earn Program, 232,000 Gemini users utilized them as collateral for loans granted to Genesis. As of right now, the value of the security is close to $1.6 billion.

Genesis has repeatedly taken actions to harm Earn users and to hinder and delay Earn users’ recovery of their digital assets. It is time to resolve these issues so that Genesis may move forward with a reasonable plan of reorganization and Gemini may distribute the proceeds of the collateral to Earn users.

The lawsuit alleged

This complaint follows a similar one filed a week ago by New York Attorney General Letitia James, who accused Gemini, Genesis, and DCG of bilking over 230,000 investors out of over $1 billion.

Foreclosure of the collateral reportedly netted Gemini $284.3 million for the benefit of Earn customers, but Genesis has challenged the process, stopping Gemini from releasing the profits.

Disputes between Gemini and Genesis began last year when Genesis stopped being the New York exchange’s major lending partner for the Gemini Earn product. Customers may cash in their cryptocurrency gains via Gemini Earn. However, Genesis temporarily halted withdrawals when the giant crypto exchange FTX failed, and Earn clients were left wondering what happened to their money.

In January, Genesis declared bankruptcy. The Gemini Earn program was affected by the suspension of withdrawals in November 2022. In July, Gemini filed a fraud suit against DCG and its CEO Barry Silbert over the Earn program. According to the lawsuit, Gemini Earn users make up 99% of Genesis’ debtors, and their claims account for 28% of all claims by value. The former partners are being sued by the U.S. Securities and Exchange Commission for allegations that Gemini Earn sold securities without first registering them with the SEC.

Advertisement

You May Also Like

By 360

Thousands of MILLIONAIRES are made every single cycle! Will you be one of them?

By 360

Elon Musk’s announcement which resulted in MASS FOMO retail driven buying was an X FACTOR of this cycle.

Business

The central banks would design and define the monetary and governance rules for their digital currency by using Consensys' Quorum platform

Exclusive

Are you taking all necessary steps to keep your crypto assets safe?

Subscribe to our Free Trade of the Month Newsletter
Submit your name and email and receive access to 360 Elite Trifecta Trading Alerts free for one month worth $129!
Get a free trading signal every month!
Subscribe to our Free Trade of the Month Newsletter
Submit your name and email and receive access to 360 Elite Trifecta Trading Alerts free for one month worth $129!
Get a free trading signal every month!
polkadot
Polkadot (DOT) $ 5.76 6.66%
bitcoin
Bitcoin (BTC) $ 64,771.35 0.97%
ethereum
Ethereum (ETH) $ 3,381.83 3.56%
cardano
Cardano (ADA) $ 0.369496 7.90%
xrp
XRP (XRP) $ 0.489744 2.83%
stellar
Stellar (XLM) $ 0.089401 8.17%
litecoin
Litecoin (LTC) $ 71.43 7.51%