Gemini Sues Genesis Over $1.6 Billion Bitcoin Shares Ownership in Ongoing Legal Battle

In a recent lawsuit filed in the U.S. Bankruptcy Court Southern District of New York, Gemini, a New York-based cryptocurrency exchange, has taken legal action against digital asset lender Genesis over the ownership of $1.6 billion in Grayscale Bitcoin Trust shares. The dispute stems from Genesis' previous role as a lending partner for Gemini's Earn program, which allowed customers to earn returns on their cryptocurrency. However, when Genesis suspended withdrawals following the collapse of FTX exchange, Gemini's Earn customers were left without access to their funds. Now, Gemini is seeking to regain control of the shares in order to repay its clients. The Collateral, valued at nearly $1.6 billion, would fully satisfy the claims of every Earn user, according to the Friday filing.

Genesis, a subsidiary of crypto behemoth Digital Currency Group (DCG), is also the controlling entity behind the Grayscale Bitcoin Trust, the largest Bitcoin fund in the world. Genesis Global, which went bankrupt in January and announced the cessation of all operations last month, is just one of many companies under DCG's umbrella. Interestingly, earlier this month, the New York Attorney General's office filed a lawsuit against DCG, Genesis Global Capital, and Gemini Trust, accusing them of defrauding customers of $1.1 billion.

Cameron Winklevoss, co-founder of Gemini Trust, has also raised concerns about DCG CEO Barry Silbert's alleged use of "bad faith stall tactics" to delay a resolution in this ongoing dispute. It remains to be seen how the legal battle between Gemini and Genesis will unfold, but the outcome could have significant implications for the cryptocurrency industry and its investors.