- Gemini has initiated legal action against Genesis Global Holdco to determine ownership of 60 million Grayscale Bitcoin Trust (GBTC) shares
- The lawsuit seeks a federal judge’s declaration that Genesis doesn’t have a rightful claim to these shares, worth nearly $1.6 billion, which were initially pledged as collateral
- The move comes after Genesis abandoned a settlement with Digital Currency Group, and Gemini aims to clarify its claims and utilize the GBTC shares to reimburse its users.
Crypto exchange Gemini has initiated legal action against Genesis Global Holdco in an escalation of the tensions between the two companies. The purpose of the lawsuit is to establish the rightful owner of 60 million shares in the Grayscale Bitcoin Trust, valued at nearly $1.6 billion. The pair have been at loggerheads ever since Genesis stopped withdrawals just over a year ago, and hostilities don’t show any signs of cooling.
Gemini: Genesis Lacks Entitlement to Shares
In a lawsuit filed in a bankruptcy court on Friday, Gemini has petitioned a federal judge to declare that Genesis lacks the entitlement to over 60 million GBTC shares initially pledged as collateral for users of Gemini’s Earn product.
Gemini vehemently asserts that these shares, the majority of which remain under the control of Genesis and its affiliates, should not be deployed to settle debts owed to other Genesis creditors.
The move follows Genesis’ decision to abandon a proposed settlement with its parent company, Digital Currency Group, in favor of pursuing a lawsuit. The settlement had been a pivotal component of a debt-repayment scheme that could have potentially enabled Genesis creditors to recover between 70 and 90 cents for every dollar owed, according to Genesis, although Gemini disputes these estimates.
Creditors Continue to Play the Waiting Game
Through this fresh lawsuit, Gemini seeks to clarify the value of its claims against Genesis and, ultimately, to utilize the GBTC shares to reimburse its users.
In the filing, Gemini’s legal team emphasized the importance of resolving these issues promptly to enable Genesis to progress with a reasonable reorganization plan and for Gemini to distribute the collateral proceeds to Earn Users.
