- The dispute arose over 60 million GBTC shares pledged as collateral by Genesis.
- This legal action follows Genesis’ decision to abandon a proposed settlement with DCG.
Gemini has filed a lawsuit against Genesis Global. The core of this dispute centers around the rightful ownership of a substantial sum of Grayscale Bitcoin Trust (GBTC) shares, valued at nearly $1.6 billion.
Gemini asserts that these shares, the majority of which remain under Genesis’ control or that of its affiliates, should not be utilized to repay other creditors of Genesis. This legal action follows closely on the heels of Genesis’ decision to abandon a proposed settlement with its parent company, Digital Currency Group, in favor of pursuing legal action.
The settlement, which Genesis abandoned, had been a crucial part of the crypto lender’s debt-repayment plan. This plan was intended to facilitate the recovery of Genesis’ creditors, potentially providing them with returns between 70 and 90 cents on the dollar, according to Genesis.
However, Gemini has expressed doubts about these estimates, setting the stage for a contentious legal battle. Thus, Gemini aims to clarify the matter of its claims against Genesis regarding the GBTC shares in the lawsuit.
Genesis and Gemini Locked in Legal Battles
In the court filing, Gemini’s legal team emphasized, “It is time to resolve these issues so that Genesis may move forward with a reasonable plan of reorganization and Gemini may distribute the proceeds of the Collateral to Earn Users.”
This lawsuit comes on the heels of a separate legal action by New York Attorney General Letitia James, who filed a lawsuit against Gemini, Genesis, and DCG, alleging the defrauding of over 230,000 investors of more than $1 billion.
Besides that, Gemini filed a lawsuit against DCG, the parent company of Genesis, and its CEO, Barry Silbert, in July, The Distributed reported. The lawsuit accuses them of engaging in “fraud against creditors.” The legal action was initiated in the Supreme Court of the State of New York, further deepening the legal turmoil surrounding Genesis’ insolvency.
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