Gemini, a cryptocurrency exchange located in the United States, filed a lawsuit against Digital Currency Group (DCG) on Friday, accusing the latter of “fraudulent activities” and seeking to avoid accountability for damages it caused to creditors.
This submission is a direct response to a previous statement made by DCG about an agreement proposal among DCG, the debtors, and the Official Committee of Unsecured Creditors.
According to Gemini, DCG hatched a plan to issue a $1.1 billion promissory note to cover up the massive financial losses brought on by the bankruptcy of Three Arrows Capital (3AC).
But DCG reportedly kept the note’s exact provisions “hidden,” resulting to deceptive disclosures to Gemini’s creditors. Instead of supplying much-needed financing, the firm alleges DCG instead borrowed a large quantity of Bitcoin (BTC) from it.
Gemini also emphasizes DCG’s unwillingness to return the almost $630 million it borrowed from the firm back in May, when it was originally due.
According to NewsBTC’s reporting, DCG’s suggested solution calls for years of credit to be extended to DCG from Genesis’s creditors, including Gemini. But Gemini plans to resist this suggestion, saying DCG should pay creditors a fair and reasonable sum.
Gemini claims DCG has been “wearing down” creditors for the last 10 months in an effort to get them to settle for a much reduced sum owing.
Gemini is unmoved by these methods and will continue to seek a fair settlement, as stated in the court petition.
Gemini claims in the petition that DCG’s proposed recovery rates are “misleading and deceptive.” The firm claims that it would be unfair to expect to receive the cash and digital assets that are rightfully Genesis’s in exchange for a tiny portion of interest and principal payments spread out over seven years from a potentially shady counterparty.
If DCG wants Gemini’s backing, it must considerably alter the conditions of the loans it offers, as stated by Gemini.
Overall, Gemini claims that DCG is to blame for the collapse of its subsidiary and has “sacrificed” the exchange and its creditors to avoid responsibility.
Despite Gemini’s promise of a $100 million premium for a speedy settlement, the firm formed by the Winklevoss twins claims that DCG’s stalling tactics have slowed down the distribution of monies to Gemini Lenders.
The failure of the Gemini Earn program and months of discussions between Gemini, the crypto lender, and DCG have led to litigation and the severing of relations between the crypto exchange and DCG, prompting Gemini to file suit.
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