Genesis Sues Gemini for $689M in ‘Preferential Transfers’

Published:

Genesis Global Capital, a bankrupt crypto lender, has filed a lawsuit against cryptocurrency exchange Gemini to recover $689 million worth of preferential transfers. According to a Nov. 21 court filing, the lawsuit claims that during the 90-day period before Genesis declared bankruptcy in January, Gemini withdrew an “aggregate gross amount” at the expense of other creditors and continues to benefit from it. The court was asked to use the remedies provided by the United States Bankruptcy Code to return Gemini to the same position as Genesis’s other creditors.

The dispute between the two crypto giants escalated into lawsuits after the collapse of crypto exchange FTX in November 2022. Gemini filed an adversary proceeding against Genesis on Oct. 27 to use 62,086,586 shares of its Grayscale Bitcoin Trust as collateral to secure loans made by 232,000 Gemini users to Genesis through the Gemini Earn program. The shares are currently worth about $1.6 billion.

In January, Genesis suspended withdrawals and subsequently filed for bankruptcy, which negatively impacted the Gemini Earn program. Gemini sued Genesis parent company Digital Currency Group (DCG) and its CEO Barry Silbert for fraud in July. In September, Genesis also sued DCG for the repayment of multiple loans worth over $600 million.

Related articles

Recent articles