According to Cointelegraph: The legal dispute between crypto lender Genesis Global Capital and Gemini Trust, the cryptocurrency exchange, continues to escalate as Genesis files a lawsuit to recover more than $689 million in what it calls "preferential transfers."
The lawsuit alleges that Gemini took advantaged of its position to the detriment of other creditors by making transfers of approximately $689,302,000 from Genesis. Genesis is now asking the court to rectify this perceived injustice.
This lawsuit is the latest episode in a public and legal feud between Genesis and Gemini that started with the collapse of the FTX cryptocurrency exchange. Genesis filed for bankruptcy in January amid allegations of selling unregistered securities, as asserted by the U.S. Securities and Exchange Commission. More trouble followed when, last month, the New York Attorney General Letitia James filed a lawsuit against Genesis, Gemini, and Genesis's parent company, the Digital Currency Group (DCG), alleging a massive fraud scheme.
Unprecedented withdrawals from Gemini preceding the bankruptcy filing, coupled with the turbulent market conditions surrounding the collapse of Terraform Labs and Three Arrows Capital, contributed to a severe run on the bank at Genesis. This is what Genesis's claim is based on.
While Genesis and DCG have faced legal action from both Genesis and the Winklevoss twins, co-founders of Gemini, Gemini has thus far not responded to the latest allegations. This lawsuit further complicates an already tangled legal web spun by the struggles of these major crypto entities.
