According to a legal filing submitted on September 15 to the United States Bankruptcy Court for the Southern District of New York, cryptocurrency exchange Gemini Trust Company has made a startling allegation against Digital Currency Group (DCG).
DCG Tries to Manipulate the Situation in Its Favor
According to Gemini’s legal team, DCG purported the use of manipulative tactics aimed at gaslighting Genesis creditors via a recovery plan filed with contrived, misleading, and inaccurate assertions.
The plan, according to a filing a few days ago, estimates that unsecured creditors would have a 70-90% recovery with a meaningful portion of the recovery in digital currencies while Gemini Earn users could get approximately 95-110% recovery for their claims.
This plan, Gemini claims would enable DCG to evade responsibility for the sum of nearly $600 billion in long-overdue debts it owes to Genesis.
Also, Gemini alleges that DCG is using misleading and inaccurate information within its recovery plan to achieve this effect on Genesis creditors, potentially coercing them into accepting terms that may not be in their best interests.
Gemini Aims to Sue DCG
Recall that in December 2020, Gemini and Genesis entered a contract to make the yield-bearing crypto product available to the exchange’s users. This then started in February 2021 and officially ended on January 8, 2022.
At the beginning of the year, Cameron Winklevoss, co-founder of Gemini Trust company provided an update to the public on its earn program, stating that the company intends to sue DCG and its CEO, Barry Silbert for the $900 million owed to Gemini customers.
Notably, the update was provided after Genesis announced that it was filing for bankruptcy protection in the United States after losing funds due to the collapse of the bankrupt TFX exchange and Three Arrows Capital.
Gemini Demands Funds From DCG
In July, Winklevoss made a final offer to the founder of DCG demanding that the latter should settle an overall debt of $1.46 billion or face a lawsuit. Gemini’s co-founder noted that the proposal is fair and reasonable for everyone and represents the floor that creditors, who are required to support a deal, will accept.