{"id":16061,"date":"2023-01-03T06:49:48","date_gmt":"2023-01-03T06:49:48","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/demand-for-arbitration-filed-against-genesis-global-capital-dcg-firm-accused-of-ochestrating-a-sham-transaction-bitcoin-news\/"},"modified":"2023-01-03T06:49:48","modified_gmt":"2023-01-03T06:49:48","slug":"demand-for-arbitration-filed-against-genesis-global-capital-dcg-firm-accused-of-ochestrating-a-sham-transaction-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/demand-for-arbitration-filed-against-genesis-global-capital-dcg-firm-accused-of-ochestrating-a-sham-transaction-bitcoin-news\/","title":{"rendered":"Demand for Arbitration Filed Against Genesis Global Capital, DCG \u2014 Firm Accused of ‘Ochestrating a Sham Transaction’ \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Three Gemini Earn users have accused Genesis Global Capital of breaching a contract and have subsequently filed a demand for class arbitration with the American Arbitration Association. In addition, the three users assert that all transactions \u201cconstituted unregistered sales of securities\u201d and therefore must be rescinded. <\/strong><\/p>\n

\u2018A Sham Transaction\u2019<\/h2>\n

A demand for class arbitration<\/a> in a case that pits three Gemini Earn users against Genesis Global Capital (GGC), its parent the Digital Currency Group (DCG), and Genesis Global Trading has been filed with the American Arbitration Association (AAA). According to a statement released by Silver Golub & Teitell, the law firm representing the claimants. GGC and the related entities are accused of breaching the terms of the so-called Master Agreement.<\/p>\n

According to the Dec. 30, 2022 statement<\/a>, the claimants allege the initial breach of contract \u201cwhen GGC became insolvent in the summer of 2022 but concealed its insolvency from lenders.\u201d The statement adds that GCC was able to achieve this by \u201corchestrating a sham transaction\u201d in which DCG acquired the right to \u201cthe 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.\u201d<\/p>\n

Genesis Global Capital Accused of Selling Unregistered Securities<\/h2>\n

To the claimants, GCC\u2019s refusal to acknowledge or fix the insolvency amounted to a breach of contract. In addition, claimants assert that this alleged insolvency constituted an \u201cEvents of Default which automatically terminated the loans between claimants and GGC thus triggering GGC\u2019s obligation to return claimants\u2019 digital assets.\u201d<\/p>\n

The statement added:<\/p>\n

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Claimants also allege that GGC further breached the Master Agreement beginning on November 16, 2022, as GGC has refused to return Gemini Users\u2019 digital assets despite Gemini Users\u2019 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.<\/p>\n<\/blockquote>\n

As previously reported<\/a> by Bitcoin.com News, GGC\u2019s affiliate Genesis Global Trading (GGT) froze withdrawals and new loan originations on Nov. 16, and according to a company spokesperson this decision was \u201cmade in response to the extreme market dislocation and loss of industry confidence.\u201d At the time, the spokesperson insisted the decision had no impact on DCG and its other entities.<\/p>\n

Meanwhile, in addition to the breach of contract allegations, claimants also argued that \u201call transactions entered into pursuant to the Master Agreement constituted unregistered sales of securities.\u201d Consequently, the claimants want the contracts of sale rescinded on that basis.<\/p>\n

What are your thoughts on this story? Let us know what you think in the comments section below. <\/strong><\/em><\/p>\n

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\nTerence Zimwara <\/h6>\n

\nTerence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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