Legal Battle Between Genesis and Gemini Over Alleged Preferential Crypto Withdrawals
In recent legal action, Genesis Global Capital LLC, a subsidiary of Digital Currency Group, has taken Gemini to court, seeking to recover $689 million. The lawsuit alleges that Gemini made significant withdrawals in the months leading up to Genesis’ Chapter 11 bankruptcy filing, unfairly benefitting itself at the expense of other creditors.
The complaint, filed on November 21, 2023, focuses on transactions occurring in the 90 days before Genesis’ bankruptcy declaration, totaling approximately $689.30 million. This move, according to Genesis, was detrimental to the broader creditor base, especially amidst the cryptocurrency market turbulence in 2022.
Amidst significant market instability, Genesis aims to use the Bankruptcy Code provisions to recover the funds through a clawback. The intention is to restore fairness and equitable treatment among all creditors, not just from a financial standpoint but also as a matter of principle.
The complaint outlines Gemini’s significant withdrawals as preferential transfers, allegedly providing an unfair advantage to the exchange platform that Genesis aims to nullify.
Hot Take
Genesis Global Capital’s move to legally challenge Gemini’s alleged preferential crypto withdrawals underscores the complexities and challenges within the crypto industry, particularly in times of market turbulence. This legal battle highlights the importance of fairness and equity in bankruptcy proceedings, especially within the evolving landscape of digital currency trading.
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