Lawyers representing Gemini Trust have filed a response to a recovery plan proposed by Digital Currency Group (DCG) for creditors of Genesis Global. The legal team accused DCG of presenting misleading and inaccurate assertions in the plan, describing it as a tactic to pay less than what it owes. The plan suggested a potential recovery rate of 70-90% for unsecured creditors and approximately 95-110% for Gemini Earn users.
In their filing to the United States Bankruptcy Court, lawyers hired by Gemini Trust argued that DCG’s recovery plan was designed to deceive and gaslight Genesis creditors. They called on the company to improve the terms of the loans provided to Genesis and demanded that DCG not exploit Genesis’ bankruptcy proceedings as an excuse for its recovery plan.
Gemini’s legal battle with DCG and cryptocurrency exchange Gemini arose from their involvement in the Gemini Earn program, which was partially financed by Genesis. In November 2022, Genesis halted withdrawals following FTX’s collapse, citing market turmoil. Consequently, the company filed for bankruptcy in January 2023.
According to Gemini’s court filings, Genesis owed over $3.5 billion to its top 50 creditors at the time of its Chapter 11 filing. To recover more than $1.1 billion in assets for approximately 232,000 Earn users, Gemini filed a claim in May. Subsequently, a lawsuit was filed against DCG and CEO Barry Silbert in June, alleging fraud. Gemini co-founder Cameron Winklevoss accused Silbert of being involved in the fraud.
The U.S. Securities and Exchange Commission (SEC) also filed a civil suit against Gemini and Genesis in January, accusing them of selling unregistered securities through the Earn program. In response, the two companies filed a motion to dismiss the case in May, but as of now, the lawsuit is still ongoing.
The legal battle between Gemini Trust and DCG highlights the complex issues surrounding Genesis Global’s bankruptcy. With conflicting recovery plans and allegations of fraud, creditors face uncertainty regarding their potential recovery rates. As the court proceedings continue, the outcome of the case will have significant implications for the future of Genesis Global and the cryptocurrency lending industry as a whole.
In conclusion, the legal representatives of Gemini Trust have criticized the recovery plan proposed by DCG for Genesis creditors. They argue that DCG’s plan is misleading and inadequate, designed to pay less than what is owed. The ongoing legal battle between Gemini Trust, DCG, and Genesis Global raises questions about the transparency and accountability of the cryptocurrency lending industry. As the case continues, creditors and industry participants will await the court’s decision and its potential impact on the future of Genesis Global and the wider cryptocurrency community.
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