Gemini Users File a Class Action Arbitration Against Genesis Global Capital

Three users have accused Genesis Global Capital of breaching a contract and offering unregistered securities.

Barry Silbert sitting next to an angry man holding a megaphone and shouting

Genesis Global Capital has been accused of breaching a contract by three Gemini earn users. The users filed a demand for class arbitration with the American Arbitration Association.

Genesis Hit with Arbitration Claims

In a statement released by Silver Golub & Teitell, the law firm representing the three claimants, Genesis breached the terms of its Master Agreement when Gemini suspended its Earn redemption program due to Genesis freezing withdrawals.

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According to the claimants, Genesis Global Capital initially breached the contract โ€œwhen GGC became insolvent in the summer of 2022 but concealed its insolvency from lenders.โ€ Genesis did not disclose its insolvency until November 2022.

They further claimed that Genesis was involved in a โ€œsham transaction.โ€ This occurred when its parent company DCG acquired โ€œthe right to collect a $2.3 billion debt owed to GGC by insolvent hedge fund Three Arrows Capital for a promissory note of $1.1 billion due in 2033.โ€

Genesis Accused of Selling Unregistered Securities

The statement accused Genesis Global Capital of selling unregistered securities as the insolvency automatically terminated the loans, triggering GGCโ€™s obligation to return claimantsโ€™ digital assets.

They claim that the continuous sale after insolvency creates unregistered securities. Another lawsuit was also filed against Gemini by Brendan Picha and Max J. Hastings for offering unregistered securities via its Gemini Earn program.

On the Flipside

  • Gemini co-founder Cameron Winklevoss has published an open letter to DCG founder and CEO Barry Silbert accusing him of engaging in โ€œbad faith stall tacticsโ€ against Gemini Earn users.

Why You Should Care

The arbitration filed by the Gemini Earn users against GGC seeks to rescind the contracts of sale and related damages.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia

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