Clients File for Class Action Arbitration Case Against Gemini Earn

• Gemini Earn users filed a request for class-action arbitration against Genesis Global Capital and its parent company Digital Currency Group.
• Gemini allegedly breached its  Master Agreement when it became insolvent and failed to inform its users.

Three users of the regulated crypto exchange Gemini have filed a class action arbitration against Genesis Global Capital and Digital Currency Group (DCG). The investors allege that Gemini’s Earn program did not register their assets as securities and that Genesis failed to return their digital assets.

The Earn program offered 7.4% interest to customers who lent their cryptocurrencies to Gemini. The investors claim that Gemini did not register their assets as securities with the Securities and Exchange Commission (SEC), as required by law. They also allege that Genesis failed to return their digital assets after halting withdrawals on November 16.

The investors are seeking class action arbitration, which is a type of arbitration that binds all absent parties unless they opt out. They are seeking damages for the losses they incurred as a result of Gemini’s and Genesis’s actions.

The lawsuit is the latest in a series of legal challenges facing Gemini and DCG. In December, Three Arrows Capital (3AC) accused DCG of owing it $1.675 billion. 3AC also alleged that DCG used this money to prop up other DCG ventures, instead of repaying creditors.

The lawsuit against Gemini and Genesis is a sign of the growing scrutiny that crypto exchanges are facing. As the crypto market matures, regulators are increasingly looking to hold exchanges accountable for their actions. This lawsuit could have implications for other crypto exchanges that offer similar Earn programs.