Gemini Sues Genesis Over $1.6 Billion in Grayscale Bitcoin Trust Shares
Gemini, a New York-based cryptocurrency exchange, has filed a lawsuit against digital asset lender Genesis over the ownership of $1.6 billion worth of Grayscale Bitcoin Trust shares. The lawsuit, filed in the U.S. Bankruptcy Court Southern District of New York, aims to regain control of the shares in order to repay the clients of Gemini’s Earn program.
The Genesis-Gemini Conflict
Genesis was once a primary lending partner for Gemini’s Earn product, which allowed customers to earn returns on their cryptocurrencies. However, following the collapse of FTX and the subsequent industry-wide contagion last year, Genesis suspended withdrawals, leaving Earn customers without access to their funds.
Gemini’s Efforts to Retrieve Funds
Gemini is now seeking to retrieve the funds in order to satisfy its clients. According to the Friday filing, the collateral is currently valued at nearly $1.6 billion, which would fully cover the claims of every Earn user. The filing also alleges that Genesis has taken actions to harm Earn users and hinder their recovery of digital assets.
Genesis and Digital Currency Group
Genesis is a subsidiary of Digital Currency Group (DCG), which also controls the Grayscale Bitcoin Trust. Genesis Global went bankrupt in January and recently announced the cessation of all operations. Earlier this month, the New York Attorney General’s office sued DCG, Genesis Global Capital, and Gemini Trust for allegedly defrauding customers of $1.1 billion.
The Winklevoss Connection
Gemini Trust was founded by Cameron and Tyler Winklevoss, prominent figures in the crypto industry. Cameron Winklevoss has accused DCG boss Barry Silbert of using stall tactics to delay a resolution in the ongoing conflict.
Hot Take: Gemini Takes Legal Action to Retrieve Funds
Gemini’s lawsuit against Genesis highlights the ongoing battle between the two companies over the ownership of $1.6 billion in Grayscale Bitcoin Trust shares. With Genesis suspending withdrawals and leaving Earn customers without access to their funds, Gemini is determined to regain control of the shares and repay its clients. The lawsuit further exposes the conflicts within Digital Currency Group, as Genesis is a subsidiary of the company. The outcome of this legal action will have significant implications for both Gemini and Genesis, as well as the broader crypto industry.
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