Digital Currency Group Accused of Deceptive Practices in Bankruptcy Plan
Crypto exchange Gemini has accused venture capital firm Digital Currency Group (DCG) of engaging in deceptive practices to avoid fulfilling its obligations to the creditors of its bankrupt crypto lending unit, Genesis. In July, Gemini filed a lawsuit against DCG after Genesis went bankrupt owing $735 million to users of Gemini Earn. On September 13th, DCG proposed an agreement offering unsecured creditors, including Gemini Earn users, a chance to recover a significant portion of their funds. However, Gemini claims that DCG’s proposed recovery rates are misleading and deceptive. It alleges that DCG is trying to pay less than what it owes to Gemini lenders.
Gemini’s Allegations Against DCG
In a new court filing, Gemini stated that DCG’s proposed recovery rates are “misleading at best and deceptive at worst.” It argues that the proposed deal would allow DCG to shortchange Gemini lenders by paying them less than they are owed. According to Gemini, receiving fractional shares of interest and principal payments over seven years from a risky counterparty is not equivalent to receiving the actual cash and digital assets owed by Genesis. The exchange accuses DCG of making contrived and inaccurate assertions to escape responsibility for the harm caused to creditors.
Hot Take: Questionable Actions by Digital Currency Group
Gemini’s allegations against Digital Currency Group raise concerns about the firm’s actions in relation to the bankruptcy plan for Genesis. If proven true, these deceptive practices could undermine trust in DCG and have broader implications for the crypto industry as a whole. It is essential for companies operating in the space to uphold transparency and fulfill their obligations to stakeholders. This case highlights the need for robust regulatory frameworks and oversight to protect investors and ensure fair practices within the cryptocurrency ecosystem.
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