The Securities and Exchange Commission (SEC) has alleged that both companies unlawfully sold unregistered securities via their Earn program. In light of this, Gemini is making preparations to submit a formal request aiming to recover more than $1.1 billion worth of digital assets from Genesis, which belong to its extensive user base of over 200,000 Earn participants.
Gemini Alleges DCG Failed To Pay $630M In Crypto Custody Dispute
Gemini CEO Cameron Winklevoss has issued a legal threat against DCG CEO Barry Silbert and DCG itself regarding the repayment of a $900 million loan. This action comes in response to Genesis, a DCG subsidiary, filing for Chapter 11 bankruptcy amidst allegations of commingled funds and ongoing disputes concerning loan repayments.
Both firms, according to the U.S. Securities and Exchange Commission (SEC), have been accused of selling unregistered securities through their Earn program.
As a result, the situation has rapidly escalated and garnered significant attention. While Gemini and DCG are currently engaged in discussions, Gemini has stated that if an agreement cannot be reached, they and other parties are proposing an alternative reorganization plan with Genesis that does not require DCG’s approval.
The outcome of these discussions remains uncertain, and any potential agreement will likely depend on whether DCG is willing to engage in good faith negotiations.
Gemini co-founder Cameron Winklevoss has publicly accused DCG CEO Barry Silbert of employing “bad faith stall tactics,” further intensifying the controversy. In the meantime, Gemini is preparing to file a claim to recover more than $1.1 billion in digital assets from Genesis on behalf of its 200,000 Earn users.
This unfolding situation has captured the attention of industry insiders and investors, as they closely monitor its development and anticipate its potential implications for the wider cryptocurrency market.
Recently, Genesis’ lawyers submitted a request to the Bankruptcy Court of the Southern District of New York, seeking an extension for the filing of a Chapter 11 plan and the solicitation of acceptances. This suggests that the case may continue for an extended period.
Meanwhile, many individuals are advocating for increased transparency and accountability within the industry, emphasizing that incidents like this undermine trust in cryptocurrencies and the companies involved in this sector.
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