Gemini Trust Co recently announced that cryptocurrency lender Genesis has filed a motion in U.S. Bankruptcy Court seeking authorization to sell trust assets. The motion also aims to monetize Genesis’s interests in two Grayscale Ethereum trusts, which provide investors with exposure to cryptocurrency.
Genesis has requested an expedited hearing on the motion, scheduled for Feb. 8. This comes after Genesis settled a lawsuit with the U.S. Securities and Exchange Commission over its defunct Gemini Earn lending program. The Earn program was discontinued during a crypto market crash in November 2023, and Genesis is now moving ahead with a liquidation plan to repay customers in cash or cryptocurrency, based on the types of currency they had deposited in the Earn program.
Additionally, the motion filed by Genesis seeks authority for Gemini Trust Co to monetize the initial collateral of 30,905,782 shares of Grayscale Bitcoin Trust.
The failure of the Earn program has led to litigation involving Genesis, Gemini, and Genesis’s parent company, Digital Currency Group.
This development in the cryptocurrency space showcases the complexities and challenges faced by companies operating in the digital asset industry. It also underscores the need for regulatory compliance and risk management within the sector.
As the industry continues to evolve and navigate legal and financial hurdles, it’s essential for stakeholders to stay informed about the latest developments. This will enable them to make informed decisions and mitigate potential risks associated with cryptocurrency investments and lending programs.