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Failed cryptocurrency provider Genesis sues Gemini to recover $689 million from “preferential transfers”

According to what was reported in a news report document Failed crypto lender Genesis Global Capital reportedly filed a lawsuit against cryptocurrency exchange Gemini on November 21 in an attempt to recover $689 million in privileged transfers.
During the 90-day period before Genesis filed for bankruptcy in January, Gemini received “an aggregate gross amount of not less than approximately $689,302,000” at the expense of other creditors and continued to benefit by preserving properties Genesis sought to acquire, the suit alleges. It is claimed. to get better. Genesis counsel asked the court to use remedies under the U.S. Bankruptcy Code to “redress the injustice and place Defendants in the same position as Plaintiff’s other similarly situated creditors.”
The two crypto giants were involved in a public fight over the recovery of funds, which turned into lawsuits after the collapse of the FTX crypto exchange in November 2022.
In addition to legal action, the CEOs of the two companies were also embroiled in public disputes, accusing each other of uncooperation and threatening legal action.
On October 27, Gemini initiated legal action against Genesis over the use of 62,086,586 shares of the Grayscale Bitcoin Trust. The shares were used as collateral to secure loans made by 232,000 Gemini users to Genesis through the Gemini Earn program. The value of the collateral is currently approximately $1.6 billion.
Genesis filed for bankruptcy in January after suspending withdrawals in November 2022. Genesis’ bankruptcy negatively impacted its Gemini Earn program, prompting the crypto exchange to sue Genesis’ parent company Digital Currency Group (DCG) and its CEO Barry Silbert for fraud in July. .
In September, Genesis also sued DCG, demanding repayment of multiple loans worth more than $600 million.

Translation by Walter Rizzo

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