The cryptocurrency exchange Gemini has filed suit against Genesis Global Capital, seeking access to more than 62 million GBTC shares worth $1.6 billion. CoinDesk reports this.<\/p>\n
\\n\u00abThe collateral is currently valued at approximately $1.6 billion. The amount fully covers and satisfies the claims of every Earn user\u00bb, the lawsuit states.<\/cite><\/p><\/blockquote>\n
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The platform’s lawyers noted that Genesis pledged to provide GBTC shares as collateral for loans from Gemini Earn users.<\/p>\n
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\\n\u00abGenesis has repeatedly harmed Earn users, impeded and delayed recovery of their digital assets. \u2026 It is time to resolve these issues so that Genesis can move forward with a sensible reorganization plan, and Gemini can distribute the proceeds from the collateral among users\u00bb, the filing states.<\/cite><\/p><\/blockquote>\n
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On 16 November 2022, Genesis Global Capital frozen withdrawals<\/a> and the issuance of new loans. The firm cited \u201cincreased demand\u201d from clients after the collapse of FTX<\/a>.<\/p>\n
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The trouble stemmed from the collapse of hedge fund 3AC<\/a> in July of the same year. The latter did not meet its obligations to Genesis Global Capital for $2.36 billion<\/a>. The backing for the firm came from its parent company DCG<\/span>.<\/p>\n
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In January 2023, Genesis Global Holdco and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy<\/a>. According to reports, their obligations exceed $3 billion<\/a>. This amount includes claims by Gemini clients for $900 million<\/a>.<\/p>\n
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In May, DCG missed<\/a> a payout of $630 million to the Bitcoin exchange. In July, Gemini filed suit, seeking the immediate return of $1.1 billion for 232,000 affected Earn users. DCG opposed<\/a> this. This was followed by an ultimatum from the Winklevoss brothers, who sought a payout of $1.46 billion<\/a>.<\/p>\n
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In August, DCG promised to compensate<\/a> Genesis creditors from 70% to 90% of funds. However the latter called the offer \\”unsatisfactory\\”<\/a> and threatened to block any final bankruptcy deal on such terms.<\/p>\n
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Back in September Genesis filed for suit<\/a> against DCG over unpaid loans of $600 million. In the same month, reports said that Gemini moved $282 million<\/a> before the counterparty’s bankruptcy.<\/p>\n
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In October, the New York State prosecutors filed suit<\/a> against Gemini, Genesis, DCG and the leadership of the companies, accusing them of deceiving more than 230,000 investors of more than $1 billion.<\/p>\n
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c5f4adb9-6ad0-4535-a18c-052c9a4fba7c<\/a> by ForkLog<\/a> on Scribd<\/p>\n