Gemini Files Lawsuit Against Genesis for $1.6 Billion in GBTC Shares
Gemini, a crypto exchange, has taken legal action against Genesis Global in an attempt to gain control of 60 million shares of the Grayscale Bitcoin Trust (GBTC), which are valued at approximately $1.6 billion.
Background: Gemini Earn Product
The feud between Gemini and Genesis began in 2022 over the Gemini Earn product. Genesis was the primary lending partner for this high-yield product, offering depositors up to 8% yields.
Lawsuit Details
In the lawsuit filed on October 27, Gemini is seeking a ruling from a federal judge to establish that Genesis has no rights to more than 60 million GBTC shares. These shares were used as collateral by users of Gemini’s Earn product. The aim is to regain control of the shares and repay the clients who participated in the Earn program.
Genesis’ Bankruptcy and Allegations
Genesis filed for Chapter 11 bankruptcy in January due to market downturns and liquidity issues, aggravated by the collapse of FTX crypto exchange. Gemini alleges that Genesis has taken actions to harm Earn users and impede their recovery of digital assets.
SEC Charges and New York Lawsuit
Both Gemini and Genesis faced charges from the US SEC earlier this year for selling unregistered securities related to the Earn product. Additionally, New York Attorney General Letitia James has filed a lawsuit against Gemini, Genesis Global Capital, and Digital Currency Group (DCG), accusing them of defrauding investors out of more than $1 billion.
Hot Take: Legal Battle Over Control of GBTC Shares
Gemini’s lawsuit against Genesis for control of $1.6 billion in GBTC shares highlights the ongoing dispute between these crypto industry players. The lawsuit aims to determine ownership of the shares and secure funds for Gemini’s Earn program participants. This legal battle adds to the existing troubles faced by both Gemini and Genesis, including SEC charges and allegations of fraud. The outcome of this lawsuit will have significant implications for the parties involved and may shape future regulations in the crypto industry.
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