Three Gemini Earn users have filed a request for class action arbitration against Genesis Global Capital and Digital Currency Group in response to Gemini suspending its Earn redemption program due to Genesis freezing withdrawals. DCG is also the parent company of CoinDesk.

The claimants allege Genesis has failed to return their and all Gemini Earn users' digital assets as required under the Master Agreements between the firm and users.

They claim Genesis first breached the Master Agreement when the firm became insolvent in the summer of 2022, but concealed its insolvency from its customers.

Genesis then, they allege, engaged in a sham transaction with its parent company, DCG, to conceal the insolvency, exchanging the right to collect a $2.3 billion debt owed to Genesis by the now-insolvent hedge fund Three Arrows Capital for a promissory note of $1.1 billion due in 2033.

The group also claims that Genesis’ Master Agreement effectively is creating unregistered sales of securities, and are seeking to rescind the contracts of sale and related damages.