Genesis Files Lawsuit Against Gemini to Recover $689M in Preferential Transfers – Coinpedia Fintech News
Genesis Global Capital, a crypto lender that recently filed for bankruptcy, has initiated legal proceedings against Gemini Trust, a major cryptocurrency exchange. The aim is to recover $689 million, which Genesis claims were ‘preferential transfers’ made by Gemini, creating what Genesis considers an unfair advantage.
Genesis Sued Gemini for $689M
According to a court filing on November 21, Genesis Global Capital has filed a lawsuit against Gemini Trust, asserting that the cryptocurrency exchange made preferential transfers amounting to approximately $689,302,000.
Genesis argues that these transfers disadvantaged other creditors and seeks the court’s intervention to rectify this perceived unfairness.
The legal dispute between these two crypto giants emerged during a public feud following the collapse of the FTX crypto exchange, with both parties embroiled in lawsuits over fund recovery.
Earlier in July, Gemini’s sued genesis parent company, Digital Currency Group (DCG), over allegations labeled as “defamatory” and a “publicity stunt
Subsequently, in September, Genesis sued its parent company, DCG, aiming to recover multiple loans exceeding $600 million. Meanwhile, these loans were collateralized with 60 million shares of the Grayscale Bitcoin Trust (GBTC), valued at around $1.6 billion, as reported by Coinpedia.
U.S. Authorities Involved in Legal Proceedings
The legal saga extended to involve U.S. authorities. In January, just before Genesis filed for bankruptcy, the U.S. Securities and Exchange Commission (SEC) accused both Genesis and Gemini of selling unregistered securities.
Last month, New York Attorney General Letitia James filed a lawsuit against DCG, Genesis, and Gemini, alleging fraud against over 230,000 investors, including at least 29,000 New Yorkers, totaling more than $1 billion.
The filing claims that during the market turmoil caused by the collapse of Terraform Labs and digital asset hedge fund Three Arrows Capital, Gemini initiated “unprecedented withdrawals” before the bankruptcy filing, contributing to a “run on the bank.”
In the 90-day preference period, Gemini demanded the repayment of previous loans to Genesis, which Genesis argues were “avoidable” given their belief that Genesis was “insolvent.”
Eventually, the fallout from Genesis’s bankruptcy affected the Gemini Earn program, leading to Gemini suing Genesis’s parent company, DCG, and its CEO Barry Silbert for fraud in connection with the Earn program in July.
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