Gemini, a major cryptocurrency exchange, has been embroiled in a legal dispute with Genesis, its lending partner for the Gemini Earn program, for several months now. The disagreement began when Genesis halted withdrawals due to financial difficulties, forcing Gemini to suspend the program and affecting over 340,000 investors with $900 million in November 2022.
Understand Better: Gemini vs Genesis – All Ready for Legal Battle – Coinpedia Fintech News
The breach of the framework agreement
The framework agreement between Genesis and Gemini was terminated when Genesis became insolvent in 2022, but did not disclose this information to Gemini. Genesis also engaged in a fraudulent transaction with its parent company DCG, exchanging the right to collect $2.3 billion in debt owed to Genesis by hedge fund “Three Arrows Capital” for a $1.1 promissory note. billion due in 2033.
Related: Crypto Exchange Gemini is under intense scrutiny! New York Regulator Launches Investigation into FDIC Claims – Coinpedia Fintech News
Mediation to resolve conflicts
Genesis, Digital Currency Group (DCG), Unsecured Creditors Committee (UCC), Creditors Committee and Gemini have agreed to initiate a 30-day mediation process to reach a final resolution as soon as possible. The mediation will focus on DCG’s economic contribution to the bankruptcy estate for the benefit of all creditors, including Earn users, and aims to resolve Genesis’ bankruptcy plan.
Gemini supports mediation and looks forward to working with the parties to reach a resolution. However, they expressed frustration with the slow progress between the parties and the need for urgency. The next status conference with the Court is scheduled for May 4.
Damage to reputation and urgency
The ongoing dispute has impacted Gemini’s reputation as users cannot access their funds. The mediation process is essential to resolving the bankruptcy plan, and if DCG is unable to pay and/or restructure its debt, it risks defaulting on its obligations.
Expected positive result
Gemini is optimistic about a positive outcome of the mediation process and is working on a solution as soon as possible. This ongoing dispute highlights the need for greater regulatory oversight in the cryptocurrency industry to protect investors and ensure market stability.
Will Gemini and Genesis finally come to a resolution? The future of the crypto market hangs in the balance. Stay tuned for more news!
