Gemini legal team accuses DCG of ‘gaslighting’ Genesis creditors
Attorneys representing Gemini Trust have pushed back against a plan proposed by Digital Currency Group (DCG) for lenders of Genesis Global.In a Sept. 15 filing in the United States Bankruptcy Court for the Southern District of New York, the legal group implicated DCG of gaslighting Genesis lenders through “contrived, deceptive, and unreliable assertions” in the healing plan. The plan, filed in bankruptcy court on Sept. 13, declared that unsecured creditors might have a “70– 90% healing with a significant portion of the healing in digital currencies” while Gemini Earn users might anticipate an “approximately 95– 110%” healing for their claims.According to the legal group, DCG was trying to “bait the Gemini Lenders into accepting an offer” that would permit the business to pay less than it apparently owed. Legal representatives gotten in touch with the firm to “considerably improve the terms of the loans” supplied to Genesis and not use Genesis insolvency proceedings as cover for justifications in the recovery strategy.”To sidetrack the Genesis lenders from the troublesome truths of its inequitable and facially insufficient proposition, DCG promotes proposed recovery rates that are a total mirage– misguiding at best and misleading at worst,” said the Sept. 15 filing. “Make no error: Gemini Lenders will not really receive anything close in genuine value terms to the proposed recovery rates under the current arrangement in principle.”Sept. 15 filing in U.S. Bankruptcy Court for the Southern District of New York. Source: CourtListenerThe legal battle involved entanglements with cryptocurrency exchange Gemini and DCG over the Gemini Earn program, funded in part by Genesis. Genesis stopped withdrawals in November 2022 in the wake of FTXs collapse, pointing out “extraordinary market turmoil” at the time, and declared insolvency in January 2023. Related: DCG reaches arrangement in principle with Genesis financial institutions, debtorsAccording to court filings by Gemini, Genesis owed more than $3.5 billion to its top 50 financial institutions at the time of its Chapter 11 filing. The crypto exchange sued in May focused on recovering more than $1.1 billion in properties for approximately 232,000 Earn users and filed a suit against DCG and CEO Barry Silbert in June, declaring scams. “Barry was not just the designer and mastermind of the DCG and Genesis scams versus lenders, he was directly and personally included in perpetrating it,” stated Gemini co-founder Cameron Winklevoss in June.The U.S. Securities and Exchange Commission submitted a civil fit versus Gemini and Genesis in January for allegedly offering unregistered securities through the Earn program. The two firms submitted a movement to dismiss the case in May, but it was still continuous at the time of publication.Magazine: Deposit threat: What do crypto exchanges truly do with your cash?
