Genesis Global Capital Alleges $689 Million Preferential Transfers in Lawsuit Against Gemini Trust Company
Genesis Global Capital has initiated a legal battle against Gemini Trust Company and participants in the Gemini Earn Program, pursuing nearly $689 million in alleged preferential transfers. The dispute stems from the termination of the Gemini Earn Program earlier this year, which facilitated users in lending digital assets to Genesis Global through a tri-party contract.
The lawsuit asserts that Gemini Trust Company made substantial withdrawals from Genesis, totaling at least $689,302,000, during a 90-day period preceding Genesis Global’s Chapter 11 bankruptcy filing in January. Genesis argues that these transactions were “avoidable transfers,” disadvantaging other creditors and perpetuating unfairness.
Crypto Market Turmoil and Ongoing Legal Feud
Genesis claims that Gemini took advantage of market upheaval, leading to a “run on the bank” and extensive withdrawals. This legal action unfolds against the backdrop of a tumultuous year for the cryptocurrency industry, marked by the collapse of the Terra ecosystem, Three Arrows Capital, and FTX.
Following a failed bankruptcy agreement, Gemini sued Genesis, DCG, and its founder Barry Silbert for “fraud against creditors.” In turn, Gemini is also being sued for $1.6 billion in GBTC shares, with the New York Attorney General filing a complaint alleging fraudulent misrepresentation of Genesis’ financial condition.
Hot Take: Protecting and Recovering Assets in the Crypto Industry
Genesis Global Capital’s lawsuit against Gemini Trust Company reflects the challenges and legal battles underlying the volatile cryptocurrency market. As regulatory authorities and different stakeholders grapple with complex financial disputes, the need for transparency, fairness, and asset protection remains paramount in the crypto industry.
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