SGT FILES CLASS ARBITRATION AGAINST GENESIS GLOBAL CAPITAL & DIGITAL CURRENCY GROUP SEEKING RETURN OF DIGITAL ASSETS AND DAMAGES FOR BREACH OF CONTRACT AND THE UNREGISTERED SALE OF SECURITIES
Dec 31, 2022, 08:32 ET
STAMFORD, Conn., Dec. 31, 2022 /PRNewswire/ -- On Friday, December 30, 2022, at approximately 1:50pm EST, plaintiffs' class action firm Silver Golub & Teitell LLP (SGT) filed a demand for class arbitration on behalf of three Gemini Earn users (the "Claimants") seeking to represent a class of similarly situated individuals and entities against Genesis Global Capital, LLC ("GGC"), Digital Currency Group ("DCG"), and Genesis Global Trading, Inc. ("GGT") with the American Arbitration Association ("AAA").
Claimants have brought claims against GGC and related entities for breach of contract and the unregistered sale of securities and seek relief related thereto and the filing is available here: https://www.sgtlaw.com/cases/genesis-class-arb.
Claimants' filing alleges that GGC first breached the Master Agreement when GGC became insolvent in the summer of 2022 but concealed its insolvency from lenders such as Claimants. GGC concealed the insolvency in part, the demand alleges, by orchestrating a sham transaction with its parent company, DCG, whereby DCG "bought" the right to collect a $2.3 billion debt owed to GGC by insolvent hedge fund Three Arrows Capital for a promissory note of $1.1 billion due in 2033. GGC's alleged insolvency, failure to cure the insolvency, and continued representations that it was not insolvent breached the Master Agreement and constituted Events of Default which automatically terminated the loans between Claimants and GGC thus triggering GGC's obligation return Claimants' digital assets.
Claimants also allege that GGC further breached the Master Agreement beginning on November 16, 2022, as GGC has refused to return Gemini Users' digital assets despite Gemini Users' requests for redelivery of loaned assets pursuant to the Master Agreement and failed to pay Gemini Earn users the interest payments due under the Master Agreements at the end of November.
Finally, Claimants allege that all transactions entered into pursuant to the Master Agreement constituted unregistered sales of securities for which no exemption from registration applies and seek to rescind the contracts of sale and related damages on that basis.
Claimants filed their demand for class arbitration with the American Arbitration Association pursuant to the Master Agreement in effect at the time of filing seeking to arbitrate Claimants' dispute pursuant to the AAA Commercial Arbitration Rules and the AAA Supplemental Rules for Class Arbitration, which supplement all sets of AAA rules. AAA rules explicitly authorize class arbitrations under appropriate circumstances. Subject to arbitrator approval to proceed as a class arbitration, Claimants' action seeks to obtain relief for all Gemini Earn users whose funds are current trapped with GGC.
If you lent digital assets to GGC and GGC is refusing to honor your redemption request and you wish to learn more about your rights and the class arbitration described above, contact SGT Partner Ian W. Sloss via at [email protected] or submit your information on SGT's website at the following link: https://www.sgtlaw.com/cases/genesis-class-arb.
SOURCE Silver Golub & Teitell LLP
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