Bitcoin

Genesis vs. Gemini: The $689M Battle of Crypto Lenders Unleashed!

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

Bankrupt crypto lender Genesis Global Capital has filed a lawsuit against cryptocurrency exchange Gemini to recover $689 million in preferential transfers, according to a court filing on November 21.

The lawsuit alleges that during the 90-day period before Genesis filed for bankruptcy in January, Gemini withdrew an “aggregate gross amount of no less than approximately $689,302,000” at the expense of other creditors and continues to benefit through retaining the property Genesis seeks to recover.

Genesis’s council requested the court to use the remedies provided by the United States Bankruptcy Code to correct the “unfairness and return Defendants to the same position as Plaintiff’s other similarly-situated creditors.”

The two crypto giants have been embroiled in a public feud after the collapse of the FTX crypto exchange over the recovery of funds that escalated into lawsuits. Earlier, Gemini filed an adversary proceeding against bankrupt Genesis on October 27 to use 62,086,586 shares of Grayscale Bitcoin Trust (GBTC). These shares were used as collateral to secure loans made by 232,000 Gemini users to Genesis through the Gemini Earn Program. The collateral value grew to $1.6 billion as per current market conditions.

Genesis filed for bankruptcy in January earlier this year after suspending withdrawals in November 2022. The Genesis bankruptcy had an adverse effect on the Gemini Earn program, leading to the crypto exchange suing Genesis parent company DCG and its CEO Barry Silbert for fraud in connection with the Earn program in July. Later in September, Genesis also sued its parent company, DCG, seeking the repayment of multiple loans worth over $600 million.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. The information provided in this article does not constitute investment advice, financial advice, or any other kind of advice. The content provided herein is not intended to be used as a basis for making any investment decisions and should not be construed as legal, tax, or investment advice. Always do your own research and consult with a qualified professional before making any investment decisions.

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