Crypto lending firm Genesis Global Capital has filed a lawsuit against the Gemini crypto exchange. The lawsuit seeks the recovery of over $689 million in alleged “preferential transfers” made by Gemini amid market turmoil this year, court documents revealed on Tuesday.
The lawsuit marks the latest twist in the bitter legal fight between the two former business partners that erupted after the spectacular collapse of the crypto exchange FTX last year. Genesis filed for bankruptcy in January, setting off a series of lawsuits between crypto firms over the recovery of funds.
Genesis Accuses Gemini of Unprecedented Withdrawals
In its lawsuit, Genesis accused Gemini of making “unprecedented withdrawals” totaling no less than $689 million ahead of other creditors in the months leading up to its bankruptcy filing. It termed these transfers “avoidable” and alleged they were made while Genesis was already insolvent.
The lawsuit aims to claw back these funds that Genesis claims were withdrawn preferentially by the exchange to pay its own obligations. This, Genesis alleges, came at the expense of repayment to Genesis’ other creditors and investors.
The duo have been locked in a bitter dispute over the repayment of loans Genesis made to Gemini users under the Gemini Earn program. The dispute intensified after FTX’s collapse as crypto market turmoil deepened and Genesis filed for bankruptcy.
The clash has also caught the attention of regulators. In January, the SEC charged Gemini and Genesis over the allegedly unregistered Earn program. And last month, the New York AG sued them for allegedly defrauding over 230,000 investors of over $1 billion.