Cryptocurrency exchange Gemini filed an adversary proceeding against bankrupt crypto lender Genesis Global Holdco in the Southern District of New York Bankruptcy Court on Oct. 27. At issue is the fate of 62,086,586 shares of Grayscale Bitcoin Trust (GBTC). They were used as collateral to secure loans made by 232,000 Gemini users to Genesis through the Gemini Earn Program. That collateral is currently worth close to $1.6 billion.
According to the suit, Gemini has received $284.3 million from foreclosing on the collateral for the benefit of Earn users, but Genesis has disputed the action, preventing Gemini from distributing the proceeds.
Genesis has also proposed using the initial value of the collateral, which was more than $800 million, to determine the Earn Users’ deficiency claim rather than the foreclosure value. As the foreclosure value was greater than the initial value, Genesis would thus free up hundreds of millions of dollars for distribution to other creditors:
“But it was Gemini who bore the market risk related to the Initial Collateral for the benefit of Earn Users following the foreclosure; so it follows that only Earn Users are entitled to any gain resulting from Gemini taking on that risk.”
In addition, the suit alleges that Genesis’ parent company, Digital Currency Group (DCG), transferred additional collateral to Genesis “for the sole purpose of immediate onward distribution to Gemini for the benefit of Earn Users,” but Genesis is proposing to use the collateral for other purposes. Gemini argued:
“A determination giving effect to the terms of the Security Agreement, confirming Gemini’s proper foreclosure on the Initial Collateral, and recognizing the Earn Users’ rights to the Additional Collateral would facilitate the return of more than $1 billion in digital assets that Genesis has wrongfully withheld from Earn Users for nearly a year.”
Gemini Earn users comprise 99% of Genesis creditors, and their claims represent 28% of all claims by value, according to the suit.
Related: Court approves Genesis settlement of $175M to FTX, expunges billions in claims
Genesis filed for bankruptcy in January. It had suspended withdrawals in November 2022, which impacted the Gemini Earn program. Gemini sued DCG and its CEO Barry Silbert for fraud in connection with the Earn program in July.
Today, Gemini filed an Adversary Proceeding against Genesis in Bankruptcy Court seeking to recover $1.6 billion in value for the benefit of Earn Users. For the past 12 months, Genesis has been trying funnel this value away from Earn users to other creditors. With this value,…
— GeminiTrustCo (@GeminiTrustCo) October 27, 2023
The former partners are defendants in a case brought by the United States Securities and Exchange Commission claiming that Gemini Earn offered unregistered securities. New York Attorney General Letitia James sued Gemini, Genesis and DCG, claiming that the Earn program defrauded its users, who included 29,000 New Yorkers. James claimed that Gemini was aware that Genesis was in a risky financial condition.
Genesis Global Holdco did not respond to Cointelegraph inquiries by publication time. Grayscale is also owned by DCG.
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Satoshi Nakamoto, the pseudonymous creator of Bitcoin, marks their 50th birthday amid a year of rising institutional and geopolitical adoption of the world’s first cryptocurrency. The identity of Nakamoto remains one of the biggest mysteries in crypto, with speculation ranging from cryptographers like Adam Back and Nick Szabo to broader theories involving government intelligence agencies. While Nakamoto’s identity remains anonymous, the Bitcoin (BTC) creator is believed to have turned 50 on April 5 based on details shared in the past. According to archived data from his P2P Foundation profile, Nakamoto once claimed to be a 37-year-old man living in Japan and listed his birthdate as April 5, 1975. Source: Web.archive.org Nakamoto’s anonymity has played a vital role in maintaining the decentralized nature of the Bitcoin network, which has no central authority or leadership. The Bitcoin wallet associated with Nakamoto, which holds over 1 million BTC, has laid dormant for more than 16 years despite BTC rising from $0 to an all-time high above $109,000 in January. Satoshi Nakamoto statue in Lugano, Switzerland. Source: Cointelegraph Nakamoto’s 50th birthday comes nearly a month after US President Donald Trump signed an executive order creating a Strategic Bitcoin Reserve and a Digital Asset Stockpile, marking the first major step toward integrating Bitcoin into the US financial system. Related: Bitcoin at 16: From experiment to trillion-dollar asset “At 50, Nakamoto’s legacy is no longer just code; it’s a cornerstone of economic sovereignty,” according to Anndy Lian, author and intergovernmental blockchain expert. “Bitcoin’s reserve status signals trust in its scarcity and resilience,” Lian told Cointelegraph, adding: “What’s fascinating is the timing. Fifty feels symbolic — half a century of life, mirrored by Bitcoin’s journey from a white paper to a trillion-dollar asset. Nakamoto’s vision of trustless, peer-to-peer money has outgrown its cypherpunk roots, entering the halls of power.” However, lingering questions about Nakamoto remain unanswered, including whether they still hold the keys to their wallet, which is “a fortune now tied to US policy,” Lian said. Related: Bitcoin’s next catalyst: End of $36T US debt ceiling suspension In February, Arkham Intelligence published findings that attribute 1.096 million BTC — then valued at more than $108 billion — to Nakamoto. That would place him above Microsoft co-founder Bill Gates on the global wealth rankings, according to data shared by Coinbase director Conor Grogan. Satoshi’s new addresses. Source: Conor Grogan If accurate, this would make Nakamoto the world’s 16th richest person. Despite the growing interest in Nakamoto’s identity and holdings, his early decision to remain anonymous and inactive has helped preserve Bitcoin’s decentralized ethos — a principle that continues to define the cryptocurrency to this day. Magazine: 10 crypto theories that missed as badly as ‘Peter Todd is Satoshi’
The United States stock market lost more in value over the April 4 trading day than the entire cryptocurrency market is worth, as fears over US President Donald Trump’s tariffs continue to ramp up. On April 4, the US stock market lost $3.25 trillion — around $570 billion more than the entire crypto market’s $2.68 trillion valuation at the time of publication. Among the Magnificent-7 stocks, Tesla (TSLA) led the losses on the day with a 10.42% drop, followed by Nvidia (NVDA) down 7.36% and Apple (AAPL) falling 7.29%, according to TradingView data. The significant decline across the board signals that the Nasdaq 100 is now “in a bear market” after falling 6% across the trading day, trading resource account The Kobeissi Letter said in an April 4 X post. This is the largest daily decline since March 16, 2020. “US stocks have now erased a massive -$11 TRILLION since February 19 with recession odds ABOVE 60%,” it added. The Kobessi Letter said Trump’s April 2 tariff announcement was “historic” and if the tariffs continue, a recession will be “impossible to avoid.” Source: Anthony Scaramucci On April 2, Trump signed an executive order establishing reciprocal tariffs on trading partners and a 10% baseline tariff on all imports from all countries. Trump said the reciprocal tariffs will be roughly half the rate US trading partners impose on American goods. Related: Bitcoin bulls defend $80K support as ‘World War 3 of trade wars’ crushes US stocks Meanwhile, the crypto industry has pointed out that while the stock market continues to decline, Bitcoin (BTC) remains stronger than most expected. Crypto trader Plan Markus pointed out in an April 4 X post that while the entire stock market “is tanking,” Bitcoin is holding. Source: Jeff Dorman Even some crypto skeptics have pointed out the contrast between Bitcoin’s performance and the US stock market during the recent period of macro uncertainty. Stock market commentator Dividend Hero told his 203,200 X followers that he has “hated on Bitcoin in the past, but seeing it not tank while the stock market does is very interesting to me.” Meanwhile, technical trader Urkel said Bitcoin “doesn’t appear to care one bit about tariff wars and markets tanking.” Bitcoin is trading at $83,749 at the time of publication, down 0.16% over the past seven days, according to CoinMarketCap data. Magazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set
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Nakamoto’s legacy: a “cornerstone of economic sovereignty”
Is Satoshi Nakamoto wealthier than Bill Gates?
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