Genesis Sues Gemini to recover 'preferential transfers' worth $689M

CoinDesk Analysis Team CoinDesk

Crypto lender Genesis Global Capital has sued cryptocurrency exchange Gemini Trust, its former business partner, to recover more than $689 million, according to a court filing late on Tuesday.

It alleges that Gemini made preferential transfers of an "aggregate gross amount of no less than approximately $689,302,000" from Genesis at the expense of other creditors and asked the court to "correct this unfairness."

Genesis and Gemini have been embroiled in a public and legal feud ever since the collapse of FTX. Genesis filed for bankruptcy in January. Its parent company, Digital Currency Group (DCG), was sued by Gemini in July over allegations that DCG then described as "defamatory" and a "publicity stunt." In September, Genesis sued its parent company, DCG, seeking the repayment of multiple loans worth over $600 million. And then, in October, Gemini sued Genesis over 60 million shares of the Grayscale Bitcoin Trust (GBTC), valued at around $1.6 billion. Gemini's co-founders are the Winklevoss twins, Tyler and Cameron.

The saga has seen legal action from U.S. authorities, too. In January, days before Genesis filed for bankruptcy, the U.S. Securities and Exchange Commission (SEC) alleged Genesis and Gemini sold unregistered securities. Last month, New York Attorney General Letitia James filed a lawsuit against DCG, Genesis and Gemini for allegedly defrauding more than 230,000 investors, including at least 29,000 New Yorkers, of more than $1 billion.

The filing alleges that as market turmoil caused by the collapse of Terraform Labs and digital asset hedge fund Three Arrows Capital unfolded, Gemini made "unprecedented withdrawals" before the bankruptcy filing, contributing to a "run on the bank." During a 90-day period known as the preference period, Gemini demanded repayment of prior loans made to Genesis. These transfers were "avoidable" and upon "information and belief" that Genesis was "insolvent."

Gemini didn't immediately respond to a CoinDesk request for comment.

Author

CoinDesk Analysis Team

CoinDesk

CoinDesk is the media platform for the next generation of investors exploring how cryptocurrencies and digital assets are contributing to the evolution of the global financial system.

Ripple and Stellar outlook: XRP and XLM tumble as technical outlook deteriorates

Ripple and Stellar extend their declines, trading below $1.06 and $0.165, respectively, as selling pressure intensifies. In addition, weakening technical structures and bearish derivatives metrics suggest the correction for both altcoins could deepen if key support levels fail to hold.

Crypto Market Overview: Pi Network, Uniswap lead gains as Bitcoin steadies at $64,000

Bitcoin trades above $64,000 on Thursday, testing the bullish breakout of its 50-day Exponential Moving Average near $64,660. Mild recovery in BTC lifts altcoins, with Pi Network and Uniswap emerging as top performers over the last 24 hours.

Bitcoin stalls despite strong market activity across traditional assets

Bitcoin remained subdued while stocks edged higher and gold lower, suggesting the market is trapped between weakening institutional demand and growing signs of seller exhaustion, according to a Glassnode report on Wednesday.

Hashdex Bitcoin ETF to shut down following low liquidity

Hashdex Asset Management stated on Wednesday that it will liquidate and close the Hashdex Bitcoin ETF (DEFI), due to low assets under management, limited liquidity and operating costs. The fund managed approximately $14.7 million in assets as of July 30, according to a statement on Wednesday.

Bitcoin: Bulls hold the line

Bitcoin (BTC) edges slightly lower, trading at $64,300 at the time of writing on Friday but holding firmly above a key support zone. US-listed spot Bitcoin Exchange Traded Funds (ETFs) support BTC as they continued to attract institutional flows through Thursday, pointing to the fourth consecutive week of net inflows.