By: Eliza Bennet
Bankrupt crypto lender, Genesis Global Capital, has filed a lawsuit against crypto exchange Gemini Trust, seeking to recover 'preferential transfers' amounting to over $689 million. According to legal filings, Genesis alleges that in the 90-day period leading up to its bankruptcy filing, Gemini had unfairly withdrawn an aggregate gross amount of nearly $689.3 million, retaining the benefits at the expense of other creditors. The counsel for Genesis has requested the court to redress this 'unfairness' using the remedies provided under United States Bankruptcy Code.
The ongoing disputes between these crypto giants escalated into lawsuits following the collapse of crypto exchange FTX in November 2022. Each of the CEOs had publicly accused each other of noncooperation, with legal action threats further inflaming the situation. Gemini had previously filed its proceeding against Genesis in late October to use over 62 million shares of its Grayscale Bitcoin Trust as collateral to secure its users' loans to Genesis via the Gemini Earn program.
Genesis had filed for bankruptcy in early 2023 after suspending withdrawals in November the previous year, which significantly impacted the Gemini Earn program. As a result, Gemini was led to sue Genesis' parent outfit, the Digital Currency Group (DCG) and its CEO for fraud.
Further compounding matters, Genesis had also sued DCG in September, pursuing the repayment of multiple loans exceeding $600 million.
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