The accusation comes as a similar charge was levied against Gemini Earn in a separate class-action lawsuit filed in late December, which argued that its high-interest crypto-staking services should have been classified as securities. In addition to the above charges, the suit also accuses Genesis of engaging in the sale of unregistered securities. Three Gemini Earn users are seeking arbitration in a class action lawsuit against crypto broker Genesis and its parent company Digital Currency Group (DCG). But in November, Genesis said it could no longer return customer funds, citing abnormal. 3 min read Genesis Trading is a crypto prime broker. In this transaction, DCG allegedly "bought" the right to collect a $2.3 billion debt owed to Genesis by insolvent Singapore hedge fund Three Arrows Capital for a promissory note of $1.1 billion due in 2033.Īccording to the filing, this failure to cure the insolvency, and “continued representations” that it was not insolvent breached the contract and constituted “Events of Default”, which automatically terminated the loans between the claimants and Genesis, therefore “triggering GGC's obligation to return claimants' digital assets.” Gemini Earn had been giving funds to Genesis as a way to generate the program's promised returns. The filing alleges that Genesis first breached this agreement when it first became insolvent in the summer of 2022, saying it then attempted to “conceal its insolvency” by orchestrating a “sham transaction” with its parent company DCG. The claimants allege that Genesis and DCG breached their contract with them by attempting to conceal their insolvency. Withdrawals from the Earn service were shuttered in mid-November, related to financial issues with Genesis involving contagion from the collapsed crypto exchange FTX. Genesis was the primary partner for Gemini Earn, a service offered by the popular cryptocurrency exchange Gemini, which allowed users to deposit their cryptocurrencies and receive yields of between 0.45% and 8% interest, similar to a bank account.
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