According to a recent court filing, cryptocurrency lender Genesis Global Capital has sued cryptocurrency exchange Gemini Trust, its former business partner, in an attempt to recoup more than $689 million.
On behalf of other creditors, it claims that Gemini transferred preferentially “aggregate gross amount of no less than approximately $689,302,000” from Genesis, and the company requested that the court “correct this unfairness.”
Since FTX’s demise, Genesis and Gemini have been involved in a public and legal dispute. January saw Genesis file for bankruptcy. In July, Gemini filed a lawsuit against its parent company, Digital Currency Group (DCG), alleging things that DCG later called “defamatory” and a “publicity stunt.” Genesis filed a lawsuit against DCG, its parent company, in September, claiming that it was owed more than $600 million in multiple loans. Then, concerning 60 million shares of the Grayscale Bitcoin Trust (GBTC), which are estimated to be worth $1.6 billion, Gemini sued Genesis in October. Tyler and Cameron Winklevoss are the twins who co-founded Gemini.
U.S. authorities have also filed lawsuits related to the story. Days prior to Genesis’s bankruptcy filing in January, the Securities and Exchange Commission (SEC) of the United States claimed that Genesis and Gemini had engaged in the sale of securities that were not registered. In an attempt to defraud more than 230,000 investors—among them, at least 29,000 New Yorkers—of more than $1 billion, New York Attorney General Letitia James filed a lawsuit against DCG, Genesis, and Gemini last month.
Before filing for bankruptcy, Gemini allegedly made “unprecedented withdrawals” amid market turmoil brought on by the failure of Terraform Labs and digital asset hedge fund Three Arrows Capital, which allegedly sparked a “run on the bank.” The preference period, which lasted for ninety days, was when Gemini demanded that Genesis repay previous loans. Due to “information and belief” that Genesis was “insolvent,” these transfers were “avoidable.”