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Famous cryptocurrency exchange Gemini Trust Co. has filed a lawsuit against bankrupt cryptocurrency lending firm Genesis Global Holdco LLC. According to the lawsuit, the ownership of assets currently valued at $1.6 billion in Grayscale Bitcoin Trust shares will be determined. In a lawsuit filed in bankruptcy court on October 27th, Gemini asked a federal judge to determine that Genesis has no rights over more than 60 million GBTC shares, which are collateralized for Gemini’s Earn product users.
What Happened in the Lawsuit?
Gemini officials argue that the GBTC shares in question, most of which are still held by Genesis or its affiliated companies, should not be used to repay other Genesis creditors. The lawsuit came just days after Genesis announced that it had rejected a proposed agreement with its parent company, Digital Currency Group, in favor of suing the company.
According to Genesis officials, this agreement was intended to be a cornerstone of a debt repayment plan that could allow company creditors to recover between 70 and 90 cents per lost dollar. However, Gemini objected to these plans.
Gemini officials stated through the new lawsuit that they aim to clarify the value of their claims against Genesis and ultimately benefit from the sale of GBTC shares to repay their users. Gemini’s attorneys conveyed the following statement regarding the lawsuit:
“It is time to resolve these issues for Genesis to move forward with a reasonable restructuring plan and for Gemini to distribute Collateral revenues to its users.”
