In its legal battle against leading cryptocurrency exchange Gemini, Genesis Global Capital has filed a lawsuit seeking to recover a staggering $689 million in privileged transfers. The Nov. 21 court filing, which sheds light on allegations of unfair advantages and financial maneuvering that fueled friction between the two organizations, details a series of contentious transactions. Here are the details…
Genesis filed a lawsuit against the cryptocurrency exchange
Genesis Global Capital has taken its legal battle against Gemini, one of the leading cryptocurrency exchanges, a step further. He filed a lawsuit seeking to recover $689 million. The court’s filing, dated November 21, details a contentious series of transactions that fueled friction between the two organizations and shed light on allegations of unfair advantage and financial maneuvering. The crux of Genesis Global Capital’s lawsuit revolves around the allegation that Gemini significantly influenced other creditors by withdrawing an astronomical sum during the critical 90-day period before Genesis declared bankruptcy in January.
The lawsuit alleges that Gemini’s actions continue to benefit them by retaining assets that Genesis seeks to reclaim. In response, Genesis’ legal representation urged the court to use the remedies set forth in the United States Bankruptcy Code to correct what they perceived as injustice and ensure that all creditors were treated fairly.
Genesis grapples with legal disputes
This legal conflict is the culmination of a tumultuous series of events that have unfolded in the crypto realm, particularly following the collapse of FTX, a crypto exchange, in November of the previous year. The friction between Genesis and Gemini gained momentum as Genesis, facing bankruptcy, sought financial recovery and stability. However, this effort seemingly intensified the conflict between the two giants, with lawsuits and countersuits becoming the norm.
Genesis, a subsidiary of Digital Currency Group (DCG), was embroiled in legal disputes earlier in the year, including a lawsuit against its parent company DCG seeking repayment of significant loans. Meanwhile, Gemini, founded by the Winklevoss twins Tyler and Cameron, sued Genesis for 60 million shares of Grayscale Bitcoin Trust (GBTC), valued at approximately $1.6 billion.
Did Gemini benefit from Terra collapse?
The latest court filing alleges that Gemini took advantage of market turmoil following the collapses of Terraform Labs and crypto-asset hedge fund Three Arrows Capital to make significant and unprecedented withdrawals during the critical 90-day period before Genesis filed for bankruptcy. The filing alleged that these actions, considered “avoidable,” were taken with the knowledge that Genesis was facing bankruptcy. These developments underscore the complex interaction between major players in the crypto space and the legal complexities that arise in an evolving financial environment.
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