In response to Gemini suspending its Earn redemption programme due to Genesis freezing withdrawals, three Gemini Earn users have filed a request for class action arbitration against Genesis Global Capital and Digital Currency Group. The claimants contend that Genesis has failed to return their and all other Gemini Earn users’ digital assets as required by the firm’s and users’ Master Agreements. They claim Genesis first violated the Master Agreement when the company went bankrupt in the summer of 2022 but failed to notify its customers. They allege that Genesis then engaged in a sham transaction with its parent company, DCG, to conceal its insolvency, exchanging the right to collect a $2.3 billion debt owed to Genesis by the now-insolvent hedge fund Three Arrows Capital in exchange for a $1.1 billion promissory note due in 2033.
