{"id":13819,"date":"2023-10-27T18:55:15","date_gmt":"2023-10-27T18:55:15","guid":{"rendered":"https:\/\/daniellalemos-com-br.builderallwppro.com\/?p=13819"},"modified":"2023-10-27T18:55:17","modified_gmt":"2023-10-27T18:55:17","slug":"gemini-sues-genesis-over-1-6b-worth-of-grayscale-bitcoin-trust-shares-originally-posted-as-collateral","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=13819","title":{"rendered":"Gemini sues Genesis over $1.6B worth of Grayscale Bitcoin Trust shares originally posted as collateral"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p class=\"whitespace-pre-wrap\">Gemini Trust Co. filed suit against troubled digital asset lender Genesis Global Capital on Oct. 27, seeking to recover $1.6 billion in collateral for Gemini customers trapped when Genesis halted withdrawals in November.<\/p>\n<p class=\"whitespace-pre-wrap\">The lawsuit filed in bankruptcy court alleges Genesis improperly withheld collateral that was supposed to backstop loans Gemini users made through the exchange\u2019s Earn program.<\/p>\n<p>The collateral pledged under the security agreement consists of more than 30 million shares of the Grayscale Bitcoin Trust (GBTC), which were kept in an account held by Gemini for the benefit of the lenders participating in its Earn program.<\/p>\n<p>This GBTC collateral was intended to secure Genesis\u2019s obligations and liabilities under the master loan agreements governing the Earn loans. Gemini claims Genesis has prevented it from distributing the collateral proceeds to more than 230,000 Earn users.<\/p>\n<p class=\"whitespace-pre-wrap\">The dispute stems from a summer meltdown in crypto markets that forced Genesis and other major lending platforms to freeze withdrawals. Genesis, which owes creditors over $3 billion, has disputed Gemini\u2019s claim on the collateral shares.<\/p>\n<p class=\"whitespace-pre-wrap\">Thursday\u2019s lawsuit intensifies a high-stakes battle over how losses get distributed across Genesis creditors, the vast majority of whom are Gemini customers. The outcome could significantly impact the terms of any reorganization plan.<\/p>\n<p class=\"whitespace-pre-wrap\">Gemini claims it acted as an agent for the Earn users in lending out their crypto. It says it tried to protect them by requiring Genesis to post collateral. Genesis, however, has challenged the validity of Gemini\u2019s foreclosure on some of the shares.<\/p>\n<h2>Tangled web<\/h2>\n<p>The relationship between cryptocurrency exchange Gemini and troubled digital asset lender Genesis is intertwined with their common owner, Barry Silbert\u2018s Digital Currency Group (DCG). Gemini offered an Earn program in partnership with Genesis, allowing customers to lend crypto to Genesis and earn interest.<\/p>\n<p>However, when crypto markets crashed in 2022, Genesis halted withdrawals on Earn, leaving Gemini customers unable to access $900 million in funds. Gemini has since sued Genesis and DCG, alleging they misled investors about Genesis\u2019s shaky finances tied to failed hedge fund Three Arrows Capital.<\/p>\n<p>DCG has denied involvement in Earn, but Gemini contends DCG knew of and hid Genesis\u2019s insolvency.<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cryptoslate.com\/gemini-sues-genesis-over-1-6b-worth-of-grayscale-bitcoin-trust-shares-originally-posted-as-collateral\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gemini Trust Co. filed suit against troubled digital asset lender Genesis Global Capital on Oct. 27, seeking to recover $1.6 billion in collateral for Gemini customers trapped when Genesis halted withdrawals in November. The lawsuit filed in bankruptcy court alleges Genesis improperly withheld collateral that was supposed to backstop loans Gemini users made through the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":13820,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[3],"tags":[],"class_list":["post-13819","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ethereum-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/13819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13819"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/13819\/revisions"}],"predecessor-version":[{"id":13821,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/13819\/revisions\/13821"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/13820"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13819"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}