Gemini sues Genesis for $60 million GBTC shares in legal battle I Tokenhell

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• Gemini’s Quest for Control
• Allegations of Harm and Delay
• A Multifaceted Legal Battle
• Genesis Global’s Response
• A United Front Against the SEC Cryptocurrency exchange Gemini has initiated legal proceedings against its former business partner, Genesis Global, in a move that could have significant implications for the cryptocurrency industry. The lawsuit centers on the ownership of 60 million shares of the Grayscale Bitcoin Trust (GBTC) pledged as collateral for Gemini’s Gemini Earn product. This development comes as a crucial step in an ongoing legal battle that also involves Digital Currency Group (DCG), which owns all three entities—Genesis, Grayscale, and CoinDesk.

Gemini’s Quest for Control

Gemini’s lawsuit, filed within the framework of Genesis Global’s ongoing bankruptcy case, is a proactive measure aimed at gaining control over the substantial GBTC shares. The exchange asserts that securing these assets is essential to “completely secure and satisfy the claims of every single” Gemini Earn customer. These customers have been locked out of their investments since Genesis Global froze withdrawals last year, creating a pressing need for a resolution.

This move highlights the complexity of the relationship between the ious entities involved in the lawsuit, as all of them are ultimately under the same parent company, Digital Currency Group. The legal action underscores the determination of Gemini to address the concerns of its users and restore access to their locked funds.

Allegations of Harm and Delay

The lawsuit filed by Gemini paints a troubling picture of Genesis Global’s actions. It alleges that Genesis Global has repeatedly taken actions harmful to Gemini Earn users, hindering and delaying their access to their digital assets. As such, the legal battle is not only about control of the GBTC shares but also about seeking justice for affected customers who have been in limbo due to the frozen withdrawals.

Gemini argues that resolving these issues is not just in the interest of its users but also serves the broader goal of facilitating Genesis Global’s reorganization. By regaining control of the GBTC shares, Gemini aims to distribute the proceeds as collateral to its Earn users, potentially ending the protracted legal tussle on a positive note.

A Multifaceted Legal Battle

The filing of this lawsuit comes shortly after the New York Attorney General, Letitia James, filed a separate legal action against Gemini, Genesis Global, and Digital Currency Group. The suit accuses the trio of defrauding more than 230,000 investors out of over $1 billion, adding another layer of complexity to the legal landscape.

The troubles for both Gemini and Genesis Global started in 2022 when the collapse of the crypto hedge fund Three Arrows Capital and issues surrounding Sam Bankman-Fried’s FTX exchange sent shockwaves through the industry. These events ultimately led to Genesis Global’s decision to file for bankruptcy in January, setting the stage for the legal battles that followed.

In a glimmer of hope for affected customers, Genesis Global and Digital Currency Group announced in September that they were working on a proposed remuneration plan. This plan aimed to make Gemini Earn customers “nearly whole” in light of the ongoing legal disputes. It remains to be seen how this recent lawsuit will impact the proposed remuneration plan and whether it will provide a resolution for the affected users.

Genesis Global’s Response

While Gemini’s lawsuit is the latest salvo in this legal battle, Genesis Global has not immediately responded to CoinDesk’s request for comment. The absence of a response from the embattled company suggests the gravity of the situation and the complexities involved in resolving the issues at hand.

A United Front Against the SEC

Despite their differences, both Genesis Global and Gemini have shown a united front when it comes to opposing accusations from the U.S. Securities and Exchange Commission (SEC). The SEC had alleged that Gemini’s Earn product was an unregistered security, ing a joint effort by the two companies to dismiss the lawsuit targeting the program in May. This common stance underscores their shared interests in defending their products against regulatory scrutiny.

As this multifaceted legal battle continues to unfold, it remains to be seen how the cryptocurrency industry will adapt to the outcomes of these lawsuits. For now, Gemini’s lawsuit against Genesis Global has become a focal point, with its potential to secure control over the GBTC shares and provide much-needed relief for its Earn customers. The industry will closely watch these developments and their implications for the future of cryptocurrency exchanges and their associated financial products.

Navigate This Article

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• Gemini’s Quest for Control
• Allegations of Harm and Delay
• A Multifaceted Legal Battle
• Genesis Global’s Response
• A United Front Against the SEC

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