Genesis Global Capital Initiates Lawsuit Against Gemini Over Alleged 'Preferential Transfers,' Seeking Recovery of $689 Million
Crypto lender Genesis Global Capital has initiated legal action against its former business partner, cryptocurrency exchange Gemini Trust, in an attempt to recover over $689 million.
Because Bitcoin
November 22, 2023
As per a recent CoinDesk report, crypto lender Genesis Global Capital has initiated legal action against its former business partner, cryptocurrency exchange Gemini Trust, in an attempt to recover over $689 million. The lawsuit, filed late on Tuesday, alleges that Gemini executed preferential transfers totaling at least approximately $689,302,000, to the detriment of other creditors. Genesis is urging the court to rectify this perceived imbalance.
The legal wrangling between Genesis and Gemini dates back to the collapse of FTX, with Genesis filing for bankruptcy in January. The dispute has escalated, with additional lawsuits, such as Gemini suing Genesis over 60 million shares of the Grayscale Bitcoin Trust, and legal actions by U.S. authorities over allegations of selling unregistered securities.
The filing contends that Gemini, amid market turmoil triggered by the collapse of Terraform Labs and digital asset hedge fund Three Arrows Capital, executed "unprecedented withdrawals" before the bankruptcy filing, contributing to a "run on the bank" during the 90-day preference period. Gemini allegedly demanded repayment of prior loans to Genesis, which the filing deems "avoidable," asserting that Gemini had knowledge of Genesis' insolvency during this period.
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