Three Gemini Earn users have filed a request for class action arbitration against Genesis Global Capital and Digital Currency Group in response to Gemini suspending its Earn redemption program due to Genesis freezing withdrawals.
The claimants allege Genesis has failed to return their and all Gemini Earn users' digital assets as required under the Master Agreements between the firm and users. Genesis first breached the Master Agreement when the firm became insolvent in the summer of 2022, but concealed its insolvency from its customers.
Genesis then, they allege, engaged in a sham transaction with its parent company, DCG, to conceal the insolvency, exchanging the right to collect a $2.3 billion debt owed to Genesis by the now-insolvent hedge fund Three Arrows Capital for a promissory note of $1.1 billion due in 2033.
Previously, Gemini co-founder Cameron Winklevoss and DCG CEO Barry Silbert engaged in a back-and-forth on Twitter late Monday, where the exchange executive accused Silbert of engaging in “bad faith stall tactics” over plans to resume withdrawals from Genesis.
Winklevoss says that Genesis and DCG owe Gemini and its clients $900 million, and gave Silbert until January 8 to publicly commit to solving this problem.
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