Genesis Takes Legal Action Against Gemini to Reclaim $689M in ‘Preferential Transfers’

Genesis Global Capital Sues Gemini Trust for $689 Million in Alleged Preferential Transfers

Genesis Global Capital, a crypto lender, has filed a lawsuit against Gemini Trust, a cryptocurrency exchange, seeking to recover more than $689 million. The court filing, made late on Tuesday, alleges that Gemini made preferential transfers of approximately $689,302,000 from Genesis, at the expense of other creditors. Genesis is asking the court to rectify this unfairness. This legal battle between Genesis and Gemini stems from their former business partnership and has been ongoing since the collapse of FTX. Genesis filed for bankruptcy in January, and its parent company, Digital Currency Group (DCG), was subsequently sued by Gemini in July. DCG was accused of making defamatory statements and engaging in a publicity stunt. In September, Genesis retaliated by suing DCG, seeking repayment of multiple loans totaling over $600 million. Then, in October, Gemini sued Genesis over 60 million shares of the Grayscale Bitcoin Trust (GBTC), valued at around $1.6 billion.

Gemini Trust was founded by the Winklevoss twins, Tyler and Cameron. The legal dispute between Genesis and Gemini has also attracted attention from U.S. authorities. In January, just days 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 that they defrauded more than 230,000 investors, including at least 29,000 New Yorkers, out of over $1 billion.

According to the court filing, Gemini made unprecedented withdrawals before Genesis filed for bankruptcy, contributing to a “run on the bank.” These withdrawals occurred during a 90-day period known as the preference period, during which Gemini demanded repayment of prior loans made to Genesis. The filing claims that these transfers were avoidable and were made with the knowledge that Genesis was insolvent. CoinDesk reached out to Gemini for comment, but they did not immediately respond.

The ongoing legal battle between Genesis and Gemini highlights the complexities and challenges faced by the cryptocurrency industry. With regulatory scrutiny increasing and disputes arising between key players, it remains to be seen how these issues will be resolved. As the saga continues, it is clear that the repercussions of the collapse of FTX are far-reaching, impacting not only Genesis and Gemini but also investors and stakeholders in the cryptocurrency market.

In conclusion, Genesis Global Capital’s lawsuit against Gemini Trust seeks to recover over $689 million, alleging preferential transfers made by Gemini at the expense of other creditors. This legal battle is part of a larger feud between the two companies, which began with the collapse of FTX. The dispute has attracted attention from U.S. authorities, with accusations of selling unregistered securities and defrauding investors. The ongoing legal proceedings underscore the challenges faced by the cryptocurrency industry and its need for regulatory clarity. As the Genesis-Gemini saga unfolds, the implications for the wider cryptocurrency market remain uncertain.

Martin Reid

Martin Reid

Leave a Replay

Scroll to Top