The post Gemini Files Lawsuit Against Bankrupt Crypto Lender Genesis Over $1.6 Billion In Grayscale Bitcoin Trust Shares appeared first on Coinpedia Fintech News

Gemini Trust Co., a major player in crypto, has launched a legal battle against the financially troubled crypto lender Genesis Global Holdco LLC. The lawsuit was filed to know who is the legitimate owner of a substantial batch of shares in the Grayscale Bitcoin Trust, a stash approaching $1.6 billion in value.

Gemini Demands $1.6B GBTC Shares in Court

The Gemini vs Genesis battle continues and it has now taken another move. Gemini Trust Co. is taking Genesis Global Holdco LLC to court amid the lender’s bankruptcy, initiating a dispute over who rightfully claims nearly $1.6 billion in Grayscale Bitcoin Trust shares.

Gemini’s legal team approached a New York bankruptcy court today, seeking justice and access to a massive 62 million GBTC shares. The point of their argument hovers around a commitment Genesis allegedly made — using those very shares as a safety net for loans given out through Gemini’s Earn Program.

Now, Gemini is confident about recovering what they regard as a promise to their users. Gemini said,

“Today, the Collateral is worth nearly $1.6 billion, an amount that would completely secure and satisfy the claims of every single Earn User.”

Gemini is in a fierce legal struggle with Genesis and parent company Digital Currency Group over a now-defunct agreement from the Gemini Earn Program, where users lent digital assets to Genesis. The collaboration ended earlier this year.

According to Gemini’s legal filings, they scrutinized Genesis’s financial health amidst 2022’s market chaos to protect their Earn Program. The complaint further highlights Gemini’s accusations that Genesis acted to disadvantage users and prevent the recovery of their digital assets.

Both Gemini And Genesis In Trouble

At the start of the year, Genesis’s lending sector entered bankruptcy. Gemini co-founders Tyler and Cameron Winklevoss have made serious allegations against Genesis and DCG CEO Barry Silbert, accusing them of deceiving investors.

Last week, New York’s Attorney General, Letitia James, sued a bunch of big crypto companies, including the Gemini exchange, which is run by the Winklevoss twins, and others like Genesis Global Capital and Digital Currency Group. She’s saying they tricked people and caused them to lose over $1 billion.

On October 19, James charged Gemini and the others with fraud. She said they got people to put their money into Gemini Earn by telling them it was safe and would make them a lot of money.

But that wasn’t true. Gemini and Genesis were running this program, and things went really south. Around 232,000 people who invested couldn’t get to their money anymore, and some even lost everything they’d put in. The lawsuit says they totally misled their customers.

In 2022, both Gemini and Genesis hit a rough patch after the downfall of the crypto hedge fund Three Arrows Capital and Sam Bankman-Fried’s FTX. Right now, Sam Bankman-Fried is facing a trial. He’s defending himself, insisting that he didn’t scam anybody.