Gemini Takes Legal Action Against Ex-Partner Genesis, Now Bankrupt, for $1.6B in GBTC Claims

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Gemini, one of the leading cryptocurrency exchanges, has recently filed a lawsuit against its ex-partner Genesis Trading, which has declared bankruptcy. The legal action seeks to recover $1.6 billion in claims related to the Grayscale Bitcoin Trust (GBTC).

Genesis Trading, along with its parent company Digital Currency Group, has been involved in a legal dispute with Alameda Research, a bankrupt crypto investment firm. Alameda Research is now seeking the support of claimants who hold 10% of GBTC shares to strengthen their ongoing lawsuit against Genesis Trading.

Key Takeaways:

  • Gemini, a prominent cryptocurrency exchange, has taken legal action against its bankrupt ex-partner Genesis Trading for $1.6 billion in GBTC claims.
  • Alameda Research, a bankrupt crypto investment firm, is seeking the support of GBTC shareholders to strengthen their ongoing lawsuit against Genesis Trading.
  • The lawsuit could have significant implications for the crypto industry, as it determines the future for all GBTC shareholders.
  • Grayscale, the provider of the GBTC, has previously moved to dismiss Alameda’s lawsuit, arguing that it requires unaffiliated shareholders who own a minimum of 10% of the Trust’s shares to file the allegations.

High Percentage of Professional Investors Keen to Invest in Crypto, Survey Shows

A recent survey conducted by Laser Digital, a prominent digital asset business backed by Nomura, revealed that a significant number of professional investors have expressed a strong interest in investing in cryptocurrencies. The survey, which included 303 professional investors managing a total of $4.95 trillion in assets, found that an impressive 96% of respondents are keen to explore investment opportunities in the crypto market.

Among the professional investors surveyed, 82% expressed a positive outlook specifically for Bitcoin and Ethereum, two of the most well-known cryptocurrencies. Furthermore, a notable 88% indicated that either they or their clients were seriously considering investing in digital assets. This growing enthusiasm among professional investors highlights the increasing recognition of cryptocurrencies as a legitimate investment class.

Jez Mohideen, CEO of Laser Digital, emphasized the advantages that digital assets offer in investment management, particularly in terms of portfolio diversification. Mohideen explained that crypto investments can bring unique benefits to traditional investment portfolios by providing exposure to a rapidly evolving market and potentially higher returns.

Driving Factors

“The survey findings demonstrate that professional investors are recognizing the potential of cryptocurrencies and the role they can play in achieving investment goals,” said Mohideen. “As the crypto market continues to mature and regulatory frameworks are established, we expect to see increased adoption by institutional investors seeking to diversify their portfolios.”

The survey was conducted against the backdrop of increased enforcement actions by the US Securities and Exchange Commission (SEC) and the resulting market volatility. Recent lawsuits filed by the SEC against major players in the crypto industry, such as Binance and Coinbase, have created uncertainty. However, professional investors seem undeterred, demonstrating their confidence in the long-term potential of the crypto market.

As the market evolves and regulations become more defined, the interest and participation of professional investors are likely to grow further, ultimately shaping the future of the digital asset industry.

Gemini Earn Customers Face Potential $485 Million Shortfall in Genesis Bankruptcy

Gemini Earn, the cryptocurrency lending platform, is currently grappling with the aftermath of Genesis Trading’s bankruptcy, which could result in a significant shortfall of approximately $485 million for its customers. Genesis Trading, a prominent player in the crypto industry, recently filed for Chapter 11 bankruptcy, revealing a massive debt of $3.5 billion to its creditors.

As the largest creditor, Gemini faces a balance due of $769 million from Genesis. However, a dispute has arisen regarding Genesis’s claim of fulfilling its obligations to Gemini by selling collateralized GBTC shares. Gemini, understandably, is expected to challenge this claim, leading to potential court action.

This disagreement has now placed the bankruptcy case in the hands of a judge who will ultimately decide on the agreement between the two parties. Unfortunately, the resolution of this matter may cause further delays, leaving Gemini Earn customers uncertain about when they can recover their funds. To exacerbate the situation, Gemini has been classified as an “unsecured creditor,” putting it behind institutional creditors, secured creditors, and priority claims.

The outcome of this legal battle will have far-reaching implications for Gemini Earn customers and the broader cryptocurrency lending industry. It highlights the inherent risks associated with collateralized lending and underscores the need for robust risk management protocols in this evolving market.

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