Gemini Lodges Complaint Against Genesis Over $1.6 Billion in GBTC Shares

The Block reported that Gemini Trust Co. has lodged a complaint against the now-bankrupt crypto lender Genesis Global Holdco LLC, regarding the ownership of nearly $1.6 billion worth of Grayscale Bitcoin Trust (GBTC) shares. Gemini has requested a New York bankruptcy court to decide in their favor, asserting that Genesis had pledged to provide these shares as collateral to secure loans under the Gemini Earn Program.

According to Gemini, the collateral currently holds a value of approximately $1.6 billion, an amount sufficient to cover the claims of all Earn Program users. This legal battle has been ongoing for months, stemming from an agreement between the two companies as part of the Gemini Earn Program, which allowed users to lend digital assets to Genesis Global. The program was terminated earlier this year.

Gemini also accuses Genesis of taking actions detrimental to Earn Program users and deliberately delaying the recovery of users' digital assets.

This dispute has led to legal actions from both sides and regulatory scrutiny, with the Securities and Exchange Commission (SEC) suing both Gemini and Genesis over alleged unregistered securities offerings related to the Gemini Earn program in January. Additionally, New York Attorney General Letitia James filed a complaint against Genesis, Gemini, and Digital Currency Group (DCG) last week, further complicating the situation.

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The Block