Bankrupt crypto lender Genesis has slapped long-time enemy Gemini with a new lawsuit, alleging the exchange received “unfair preferential transfers” to the tune of nearly $700 million right before Genesis went bankrupt.
The document filed yesterday has asked for $689.3 million that Gemini transferred to be returned, which allegedly gave the exchange an unfair advantage over other creditors.
During the 90 day period before Genesis filed for bankruptcy, Gemini “withdrew an aggregate gross amount of no less than approximately $689,302,000” from Gemini, the filing read.
“As a result of these withdrawals, [Gemini] benefitted at the expense of [Genesis’] other creditors, and continue to benefit to this day through their retention of the property Plaintiff seeks to avoid and recover here.”
Genesis is asking the court to “correct this unfairness.”
Long live the Genesis v Gemini spat
This lawsuit follows a lengthy battle between the two former partners. Genesis, owned by Digital Currency Group (DCG), was forced to halt withdrawals after FTX collapsed last year. The crypto lender filed for bankruptcy in January.
Crypto exchange Gemini and its owners, the Winklevoss twins, said they were forced to take legal action — claiming that DCG and its chief Barry Silbert borrowed massively from Genesis, gave huge loans to irresponsible firms, and knowingly covered up insolvency from investors.
Both Genesis and Gemini are separately being sued by the Securities and Exchange Commission (SEC) for selling unregistered securities.