Gemini wants to take control of the $1.6 billion Grayscale shares in the lawsuit

Crypto exchange Gemini has filed a lawsuit against digital asset lender Genesis for a $1.6 billion takeover of Greyscale Bitcoin Trust shares.

lawsuit, The case was filed on Friday The U.S. Bankruptcy Court for the Southern District of New York ruled that the Gemini Income program aims to redeem shares for paying customers.

Gemini and Genesis have been at loggerheads since last year, when Genesis served as the primary lending partner for Gemini's income product.

The Earn program allows customers to earn returns on their cryptocurrency holdings. However, following the collapse of major crypto exchange FTX and the subsequent industry-wide chaos, Genesis stopped issuing funds, leaving Find customers uncertain about the fate of their funds.

Gemini aims to recover the money and fulfill its obligations to its customers.

The lawsuit now shows that the nearly $1.6 billion lien fully secures and satisfies the claims of all Earn users.

The main obstacle in this process, according to Gemini, is Genesis.

In a blog post about the lawsuit, Gemini Genesis said it was hampering efforts to compensate consumers and trying to shift the value to other creditor groups.

Genesis is an umbrella company of Digital Currency Group (DCG) and also controls the Greyscale Bitcoin Trust, the world's largest bitcoin fund.

“Genesis has repeatedly taken steps to harm users at Earn and to hinder and delay users from recovering their digital assets,” the lawsuit said.

“It is time to resolve these issues so that Genesis can move forward with a reasonable reorganization plan and allow Gemini to return the collateral to consumers.”

Genesis Global, a subsidiary of DCG, filed for bankruptcy in January and recently announced that all operations have ceased.

Last month, the New York attorney general's office indicted DCG, Genesis Global Capital and Gemini Trust Co. for defrauding clients of $1.1 billion.

The Gemini Trust, founded by Cameron and Tyler Winklevoss, prominent figures in the crypto space, subsequently accused DCG CEO Barry Silbert of employing “bad faith tent tactics” to resolve the dispute.