Genesis Takes Legal Action Against Gemini after SEC settlement

This settlement has paved the way for Genesis to forge ahead with a well-defined liquidation plan.

Gemini Trust Co, a prominent cryptocurrency exchange, has announced that Genesis, a crypto lending company, has taken legal action by filing a motion in the U.S. Bankruptcy Court.

This motion seeks approval for the sale of trust assets and the authorization to monetize interests in two Grayscale Ethereum trusts.

These trusts are investment vehicles that provide investors with exposure to the cryptocurrency market.

In the motion filed by Genesis on a Friday, they specifically seek permission for Gemini to monetize the initial collateral, which consists of a substantial 30,905,782 shares of the Grayscale Bitcoin Trust.

Gemini has revealed this information in an official statement.

Genesis is pushing for an expedited hearing on the motion, scheduled for February 8th. This legal move comes after Genesis recently settled a lawsuit with the U.S. Securities and Exchange Commission (SEC) related to its defunct Gemini Earn lending program.

This settlement has paved the way for Genesis to forge ahead with a well-defined liquidation plan.

The primary objective of this plan is to reimburse customers who participated in the Earn program, offering them a choice between cash and various cryptocurrencies, depending on their initial deposits.

The demise of the Earn program unfolded during a significant cryptocurrency market crash in November 2023.

As a result, it triggered a series of legal disputes involving Genesis, Gemini, and Genesis’s parent company, Digital Currency Group.

The resolution of these disputes is eagerly awaited within the crypto industry, as it could set important legal precedents and establish clearer regulations for the rapidly evolving cryptocurrency lending sector.

In summary, Genesis’s motion in the U.S. Bankruptcy Court represents a crucial step towards resolving the aftermath of the Gemini Earn program’s failure.

With the proposed sale of trust assets and the monetization of Grayscale Ethereum trusts, both companies aim to address their financial obligations and provide restitution to affected customers.

The outcome of this legal battle will not only impact the involved parties but also have broader implications for the cryptocurrency industry’s regulatory landscape.