Crypto Exchange Gemini Files Complaint Against Genesis Global Holdco
Gemini Trust Co., a crypto exchange, has filed a complaint against Genesis Global Holdco LLC, a now bankrupt crypto lender, over the ownership of nearly $1.6 billion worth of shares in the Grayscale Bitcoin Trust (GBTC). Gemini is asking a New York bankruptcy court to grant it access to over 62 million GBTC shares that Genesis promised to deliver as collateral for loans made by Gemini users through its Gemini Earn Program.
In its complaint, Gemini stated that the collateral is now worth almost $1.6 billion, which would fully secure and satisfy the claims of every single Earn User. The exchange has been engaged in a legal battle with Genesis and its parent company Digital Currency Group over an agreement related to the Gemini Earn Program.
The Dispute and Accusations
Gemini terminated the tri-party contract with Genesis Global earlier this year, which allowed users to lend digital assets. The exchange accused Genesis of harming Earn Users and intentionally delaying the recovery of users’ digital assets. It also alleged that Genesis took repeated actions to impede Gemini’s risk management efforts during market turmoil in 2022.
An Ongoing Saga
Genesis’ lending unit filed for bankruptcy protection at the beginning of the year. Since then, Tyler and Cameron Winklevoss, co-founders of Gemini, have accused Genesis and DCG CEO Barry Silbert of misleading investors. Additionally, both Gemini and Genesis faced legal action from regulators. The Securities and Exchange Commission sued them for an unregistered securities offering related to the Gemini Earn program. Recently, New York Attorney General Letitia James filed a complaint against all three parties: Genesis, Gemini, and DCG.
DCG has not provided an immediate response to requests for comment.
Hot Take: Gemini and Genesis Locked in Legal Battle Over GBTC Shares
Gemini Trust Co. has taken legal action against Genesis Global Holdco LLC in an ongoing dispute over the ownership of approximately $1.6 billion worth of shares in the Grayscale Bitcoin Trust. The complaint, filed with a New York bankruptcy court, seeks access to the shares that Genesis promised as collateral for loans made through the Gemini Earn Program. Gemini argues that the collateral would fully satisfy the claims of its users. The two firms have been at odds since the termination of their agreement earlier this year, with Gemini accusing Genesis of harming its users and impeding risk management efforts. The legal battle continues amid regulatory scrutiny and accusations of misleading investors.
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