News - Gemini sues Genesis for $1.6 billion

By Mike Hesp

Gemini sues Genesis for $1.6 billion

Laws and regulations
Exchanges

To compensate its own customers, the Winkelvoss twin exchange is now demanding GBTC shares worth billions from Genesis.

Crypto exchange Gemini sued insolvent lender Genesis last Friday, according to documents from a New York court.

According to the documents, the Winkelvoss twins' crypto exchange wants compensation for customer money it deposited with Genesis as part of its Gemini Yarn program. In the aftermath of FTX's collapse, Genesis became insolvent and stopped all disbursements.

Now Gemini is demanding back 60 million shares of the GBTC fund worth $1.6 billion that had been deposited as collateral. The amount is sufficient to "fully secure and satisfy the claims of each Earn customer," Gemini claims in court documents.

The GBTC fund is a Bitcoin product for institutional investors issued by Grayscale. Grayscale, like Genesis, is a subsidiary of Digital Currency Group (DCG).

Just over two weeks ago, New York State Attorney General Letitia James filed a lawsuit against the Gemini, Genesis and DCG triangle for alleged fraud.

According to the indictment, all three companies are accused of hiding the poor financial condition of Genesis' credit department.

The Winkelvoss twin served sued Genesis' parent company back in September.

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