Genesis Sues Gemini to Recover Over $689 Million
In an attempt to recover over $689 million in preferential transfers, crypto lender Genesis has filed a lawsuit against cryptocurrency exchange Gemini. Preferential transfers refer to payments made by an insolvent company to a creditor within 90 days before filing for bankruptcy. The recipient may be required to return the funds if certain conditions are met, ensuring equitable distribution among the bankrupt company’s creditors.
The lawsuit states that Genesis is seeking to recover the funds withdrawn through the Gemini Earn Program during the 90-day period preceding its Chapter 11 bankruptcy filing. Previously, Genesis and Gemini collaborated on the Earn investing program, allowing retail investors to earn interest by loaning out their cryptocurrencies. However, Genesis defaulted on its obligations.
Genesis alleges that Gemini benefited from these withdrawals at the expense of other creditors and continues to do so by retaining the property in question.
Genesis Demands Return of Funds
Genesis is demanding that Gemini return the funds it withdrew, as it faces a lawsuit from Gemini regarding the failure to return shares in a Bitcoin trust that were pledged as collateral for the Earn loans. In July, Gemini co-founder Cameron Winklevoss accused Genesis parent company Digital Currency Group (DCG) and CEO Barry Silbert of orchestrating a fraud scheme against creditors.
Hot Take: Genesis Seeks Justice Against Gemini
In its legal battle with Gemini, Genesis aims to recover over $689 million in preferential transfers made during its financial struggles. The lawsuit accuses Gemini of benefiting from these withdrawals at the expense of other creditors. Meanwhile, Gemini has filed a separate lawsuit against Genesis for failing to return shares pledged as collateral for loans. As both parties fight it out in court, the outcome will have significant implications for the future of crypto lending and the relationship between lenders and exchanges.
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