Gemini Sues Genesis Over $1.6 Billion Worth of GBTC
"Cryptocurrency exchange Gemini has sued Genesis Global, its former business partner for its Gemini Earn product, over 60 million shares of the Grayscale Bitcoin Trust (GBTC) that were pledged as collateral."
"In an action filed as part of Genesis' bankruptcy case, Gemini is seeking to gain control of the GBTC shares, which, Gemini said, "would completely secure and satisfy the claims of every single" Earn customer – whose money was locked up when Genesis froze withdrawals last year."
"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.
"The lawsuit comes just days after Genesis said it was dropping a proposed settlement with its parent company, Digital Currency Group, in favor of suing the firm."
"The settlement was a cornerstone of a debt-repayment plan that could have allowed Genesis creditors to recover between 70 and 90 cents on the dollar, according to Genesis. Gemini disputed those estimates."
The filing comes a week after New York Attorney General Letitia James filed a separate lawsuit against Gemini, Genesis, DCG, Michael Moro and Barry Silbert over allegedly defrauding more than 230,000 investors of more than $1 billion.