December 12, 2023
By Anjali Kochhar
In an attempt to recoup $689 million in privileged payments, bankrupt cryptocurrency lender Genesis Global Capital has launched a lawsuit against cryptocurrency exchange Gemini, according to a Nov. 21 court document.
According to the lawsuit, Gemini withdrew an “aggregate gross amount of no less than approximately $689,302,000” during the 90- day’s period prior to Genesis’ bankruptcy filing in January at the expense of other creditors. Gemini allegedly benefited from this and is still doing so by keeping the property that Genesis is attempting to reclaim. The council for Genesis asked the court to apply the US Bankruptcy Code’s remedies in order to “repair the unfairness and put Defendants in the same position as Plaintiff’s other similarly-situated creditors.”
After the collapse of the cryptocurrency exchange FTX in November 2022, the two industry titans became involved in a public dispute over the recovery of monies that led to legal action.
The CEOs of the two businesses engaged in public altercations, accusing one another of noncooperation and threatening legal action in addition to seeking legal remedies.
On October 27, Gemini moved to deploy 62,086,586 shares of its Grayscale Bitcoin Trust against Genesis in an adversarial action. Through Genesis’ Gemini Earn program, 232,000 Gemini customers made loans to the company, using the shares as collateral. Roughly $1.6 billion is the current value of the collateral.
Genesis stopped taking withdrawals in November 2022, and in January, they filed for bankruptcy. Due to the negative impact of Genesis’ bankruptcy on the Gemini Earn program, the cryptocurrency exchange filed a fraud lawsuit against Digital Currency Group (DCG), the parent company of Genesis, and its CEO, Barry Silbert, in July.
Genesis filed a lawsuit against DCG in September, requesting the return of several debts totaling more than $600 million.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
