Cryptocurrency lender Genesis Global Capital has filed a lawsuit against former partner Gemini Trust, seeking to recover $689 million in alleged ‘preferential transfers.’ The legal battle, stemming from the FTX collapse, involves disputes, bankruptcy filings, and regulatory scrutiny.
Genesis Global Capital, a major player in the crypto lending sector, has taken legal action against Gemini Trust, its former business partner, in pursuit of $689 million. The lawsuit, filed on Tuesday, claims that Gemini engaged in ‘preferential transfers’ to the detriment of other creditors. This move follows a series of clashes between the two entities, triggered by the fallout of FTX.
The Genesis-Gemini conflict includes public disputes and legal battles. Genesis filed for bankruptcy in January, with Gemini responding with a lawsuit against parent company Digital Currency Group (DCG) in July. DCG dismissed the suit as “defamatory.” In September, Genesis aimed to recover over $600 million in loans from DCG. Tensions heightened in October as Gemini counter-sued Genesis over 60 million shares of Grayscale Bitcoin Trust, valued at $1.6 billion.
This legal saga has attracted U.S. regulatory attention, with the Securities and Exchange Commission (SEC) accusing Genesis and Gemini of selling unregistered securities in January. As Genesis seeks to recover substantial sums amid bankruptcy, the court battle continues, raising questions about industry practices and regulatory compliance.