{"id":87382,"date":"2023-11-22T04:52:19","date_gmt":"2023-11-22T09:52:19","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/genesis-files-lawsuit-against-former-business-partner-gemini-trust-seeking-to-recover-689-million\/"},"modified":"2023-11-22T04:52:21","modified_gmt":"2023-11-22T09:52:21","slug":"genesis-files-lawsuit-against-former-business-partner-gemini-trust-seeking-to-recover-689-million","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=87382","title":{"rendered":"Genesis Files Lawsuit Against Former Business Partner Gemini Trust, Seeking to Recover $689 Million"},"content":{"rendered":"<div>\n<figure id=\"attachment_134868\" aria-describedby=\"caption-attachment-134868\" style=\"width: 640px\" class=\"wp-caption aligncenter\"><noscript><\/noscript><figcaption id=\"caption-attachment-134868\" class=\"wp-caption-text\">Source: AdobeStock \/ Timon<\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">Crypto lender Genesis Global Capital has taken legal action against cryptocurrency exchange Gemini Trust in an attempt to reclaim over $689 million.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The lawsuit\u00a0<\/span><span data-preserver-spaces=\"true\">was filed<\/span><span data-preserver-spaces=\"true\">\u00a0in the US Bankruptcy Court for the Southern District of New York on Tuesday, alleging that Gemini engaged in preferential transfers that amounted to approximately $689,302,000, disadvantaging other creditors.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The court filing claims that during the market turmoil caused by the collapse of Terraform Labs and digital asset hedge fund Three Arrows Capital, Gemini made unprecedented withdrawals before Genesis declared bankruptcy.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">These withdrawals, occurring within a 90-day period known as the preference period, involved the repayment of previous loans extended to Genesis.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to the lawsuit, these transfers were avoidable and made with the knowledge that Genesis was insolvent.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Dispute Between Genesis and Gemini Dates Back to FTX Collapse<\/span><\/h2>\n<p><span class=\"replacer\"><\/span><br \/><span data-preserver-spaces=\"true\">The dispute between Genesis and Gemini dates back to the collapse of FTX, which triggered a series of public and legal conflicts.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In January, Genesis\u00a0<\/span><span data-preserver-spaces=\"true\">filed for bankruptcy<\/span><span data-preserver-spaces=\"true\">, with its parent company, Digital Currency Group (DCG), subsequently facing a lawsuit from Gemini in July.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The lawsuit accused DCG of making defamatory statements and engaging in a publicity stunt.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In response, Genesis sued DCG in September, seeking repayment for multiple loans totaling over $600 million.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In October, Gemini fired back by\u00a0<\/span><span data-preserver-spaces=\"true\">suing Genesis over 60 million shares of the Grayscale Bitcoin Trust (GBTC)<\/span><span data-preserver-spaces=\"true\">, valued at around $1.6 billion.\u00a0<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">US Authorities Become Involved in Gemeni-Genesis Disputes<\/span><\/h2>\n<p><span class=\"replacer\"><\/span><br \/><span data-preserver-spaces=\"true\">The legal battles between Gemini and Genesis have also seen US authorities become involved.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In January, just before Genesis filed for bankruptcy, the U.S. Securities and Exchange Commission (SEC)\u00a0<\/span><span data-preserver-spaces=\"true\">accused Genesis and Gemini<\/span><span data-preserver-spaces=\"true\">\u00a0of selling unregistered securities.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">More recently, in a\u00a0<\/span><span data-preserver-spaces=\"true\">lawsuit filed last month<\/span><span data-preserver-spaces=\"true\">, New York Attorney General Letitia James alleged that DCG, Genesis, and Gemini defrauded over 230,000 investors, including at least 29,000 individuals from New York, of more than $1 billion.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The complaint argued that Gemini provided funds to Genesis as part of its Earn program, which were subsequently lent out to counterparties such as Three Arrows Capital and Alameda.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">However, when multiple bankruptcies occurred within the industry, resulting in defaults to Genesis, the company found itself facing a staggering $1 billion hole.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The lawsuit accused DCG of attempting to cover up these losses by falsely claiming to have absorbed them, when in reality, it had only issued a promissory note to its subsidiary Genesis.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The lawsuit also claimed that Gemini made false assurances regarding the overcollateralization of Genesis\u2019 loans.\u00a0<\/span><\/p>\n<div class=\"newsletter home-newsletter single\">\n<div class=\"left-side\">\n<p>\n        <em><br \/>\n            Enter your email for our Free Daily Newsletter        <\/em>\n    <\/p>\n<p> A quick 3min read about today&#8217;s crypto news!<\/p>\n<p>    <span class=\"response-msg\" id=\"newsletter-response\"><\/span>\n<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>Read the full article <a href=\"https:\/\/cryptonews.com\/news\/genesis-files-lawsuit-against-former-business-partner-gemini-trust-seeking-to-recover-689-million.htm\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: AdobeStock \/ Timon Crypto lender Genesis Global Capital has taken legal action against cryptocurrency exchange Gemini Trust in an attempt to reclaim over $689 million.\u00a0 The lawsuit\u00a0was filed\u00a0in the US Bankruptcy Court for the Southern District of New York on Tuesday, alleging that Gemini engaged in preferential transfers that amounted to approximately $689,302,000, disadvantaging [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":87383,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[243],"tags":[83],"class_list":["post-87382","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Genesis Files Lawsuit Against Former Business Partner Gemini Trust, Seeking to Recover $689 Million 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