In a recent development, crypto exchange Gemini has filed a lawsuit against the crypto platform Genesis Global about the ownership of shares in the Grayscale Bitcoin Trust (GBTC).
Per the lawsuit, the exchange is seeking a determination from a federal judge to establish that Genesis has no right to over 60 million GBTC shares pledged as collateral for loans made by its users. Gemini argues that these shares should not be used to repay other creditors of Genesis.
Gemini Seeks Court Determination To Secure Over 60 Million GBTC Shares
According to the lawsuit filed on Friday, October 27, 2023, the exchange entered into a security agreement with Genesis. Genesis allegedly promised to deliver 62,086,586 GBTC shares in two tranches as collateral to secure loans made by Gemini users.
Notably, the value of the collateral is currently estimated at nearly $1.6 billion, which would fully secure the claims of all the Gemini users. However, the company alleges that Genesis has “taken actions to harm” its users and hinder their collateral recovery.
Allegedly, these actions include challenging the validity of Gemini’s foreclosure on a portion of the collateral, halting the delivery of the remaining collateral to the company, and proposing a reorganization plan that would divert value away from its users to other creditors.
Genesis is now seeking to use the current value of the collateral instead of the proceeds from the exchange’s foreclosure to determine the deficiency claim of Gemini users. The exchange argues that only its users should be entitled to any gain resulting from the risk it assumes.
Court Declaration On Collateral Ownership
Gemi
Go to Source to See Full Article
Author: Ronaldo Marquez
Tip BTC Newswire with Cryptocurrency
Donate Bitcoin to BTC Newswire
Donate Bitcoin Cash to BTC Newswire
Donate Ethereum to BTC Newswire
Donate Litecoin to BTC Newswire
Donate Monero to BTC Newswire
Donate ZCash to BTC Newswire
