Gemini vs Genesis Showdown: Will Mediation End The $900 Million Dispute? – Coinpedia Fintech News
May 1, 2023Gemini and Genesis are in a legal dispute over halted withdrawals from the Gemini Earn program.
The Master Agreement between Genesis and Gemini was breached when Genesis became insolvent in 2022 and engaged in a fake transaction with Digital Currency Group (DCG).
The parties have agreed to a 30-day mediation process to bring resolution to the bankruptcy plan and Gemini hopes for a positive outcome
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 distress, forcing Gemini to suspend the program and affecting over 340,000 investors with $900 million in November 2022.
Understand It Better: Gemini vs Genesis – All Prepared for legal Battle – Coinpedia Fintech News
The Breach of Master Agreement
The Master Agreement between Genesis and Gemini was breached when Genesis became insolvent in 2022 but failed to 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 promissory note of $1.1 billion due in 2033.
Related: Crypto Exchange Gemini Faces Scrutiny! New York Regulator Launches Investigation On FDIC Claims – Coinpedia Fintech News
Mediation to Resolve Dispute
Genesis, Digital Currency Group (DCG), the Unsecured Creditors Committee (UCC), the Creditor 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 is intended to bring resolution to the Genesis bankruptcy plan.
Supportive of Mediation Process
Gemini supports mediation and is eager to work with the parties to reach a resolution. However, they have expressed frustration with the sluggish pace of progress among the parties and the need for urgency. The next status conference with the Court is scheduled for May 4th.
Reputation Damage and Urgency
The ongoing dispute has impacted Gemini’s reputation as users are unable to access their funds. The mediation process is critical to resolving the bankruptcy plan, and if DCG is unable to pay and/or restructure its debt, it risks defaulting on its obligations.
Positive Outcome Expected
Gemini is optimistic about a positive outcome in the mediation process and is working towards a solution as soon as possible. This ongoing dispute emphasizes the need for greater regulatory oversight in the cryptocurrency industry to safeguard investors and ensure market stability.
Will Gemini and Genesis finally reach a resolution? The future of the crypto market hangs in the balance. Stay tuned for more updates!
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