Benzinga - Gemini Trust Co., a leading cryptocurrency platform, has initiated legal action against the now-insolvent crypto lender, Genesis Global Holdco LLC.
The litigation revolves around the rightful ownership of Grayscale Bitcoin Trust shares, currently valued at nearly $1.6 billion, Bloomberg reported.
Gemini's move to the courts, spotlighted just weeks ahead of Benzinga's Future of Digital Assets conference on Nov. 14, seeks a judicial declaration.
The firm wants affirmation that Genesis holds no entitlement to over 60 million GBTC shares, initially pledged as collateral to patrons of Gemini’s Earn offering.
Gemini firmly contends that these shares, predominantly retained by Genesis and its associated entities, should remain untouched for the satisfaction of other Genesis' creditors.
This legal maneuver by Gemini follows closely on the heels of Genesis' announcement of retracting a proposed settlement agreement with its parent organization, Digital Currency Group.
This previously discussed settlement was pivotal to a debt-clearance strategy that, as per Genesis, would have facilitated its creditors to recoup between 70% to 90% of their investments.
However, Gemini has expressed skepticism over these projections.
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With this lawsuit, Gemini aims to delineate the worth of its claims on Genesis and ultimately utilize the GBTC shares to recompense its clientele.
In official court documents, Gemini's legal team asserted, “It is time to resolve these issues so that Genesis may move forward with a reasonable plan of reorganization and Gemini may distribute the proceeds of the Collateral to Earn Users.”
As of now, representatives from Genesis have remained silent, offering no comment on the recent lawsuit.
The bankruptcy case is registered under Genesis Global Holdco, LLC, 23-10063, in the US Bankruptcy Court for the Southern District of New York (Manhattan).
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