Genesis Global Capital Sues Gemini Exchange for $689 Million
Genesis Global Capital, a bankrupt crypto lender, has filed a lawsuit against cryptocurrency exchange Gemini to recover $689 million in preferential transfers, as per a court filing on Nov. 21.
Fued Between Two Crypto Giants
The lawsuit alleges that Gemini made preferential transfers from Genesis at the expense of other creditors and requested the court to correct the unfairness. 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.
Gemini’s Adversary Proceeding
Earlier, Gemini filed an adversary proceeding against bankrupt Genesis to use 62,086,586 shares of Grayscale Bitcoin Trust (GBTC) as collateral to secure loans made by Gemini users. The collateral value grew to $1.6 billion as per current market conditions.
Multiple Lawsuits and Bankruptcy
Genesis filed for bankruptcy in January and had an adverse effect on the Gemini Earn program, leading to the crypto exchange suing Genesis parent company DCG and its CEO for fraud in connection with the Earn program. Later, Genesis also sued its parent company, DCG, seeking the repayment of multiple loans worth over $600 million.
Hot Take
This ongoing legal battle between Genesis and Gemini over preferential transfers and loan collateral reflects the complex landscape of the crypto industry and highlights the need for regulatory oversight to protect the interests of all stakeholders. It also underscores the potential risks associated with leveraging digital assets for lending and borrowing purposes within the crypto ecosystem.
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