Crypto lender Genesis Global Capital sues its ex-partner Gemini Trust for $689 million

Genesis Global Capital, a crypto lender, has filed a $689 million lawsuit against its former partner, Gemini Trust, in the latest legal battle within the crypto industry.

The lawsuit claims that Gemini withdrew funds unfairly, causing harm to other creditors, and Genesis is asking the court to intervene.

The origins of this conflict can be traced back to the demise of FTX, which resulted in Genesis, a subsidiary of Digital Currency Group (DCG), declaring bankruptcy in January.

In July, Gemini filed a lawsuit against DCG, which DCG called “defamatory.” Following that, Genesis counter-sued DCG in September, seeking nearly $600 million in debt repayments.

In October, Gemini filed a $1.6 billion lawsuit against Genesis for shares. Notably, Gemini is operated by the Winklevoss twins.

This legal entanglement has not gone unnoticed by US authorities. Shortly before Genesis’ bankruptcy, the Securities and Exchange Commission (SEC) charged both Genesis and Gemini with marketing unregistered securities.

To further complicate matters, the Attorney General of New York filed a lawsuit last month against DCG, Genesis, and Gemini, alleging that they collectively defrauded investors out of nearly $1 billion.

The heart of Genesis’ lawsuit against Gemini is the claim that Gemini withdrew large sums of money just before Genesis went bankrupt during a period of crypto market instability.

Genesis’ financial problems were exacerbated by the alleged fund withdrawal. Genesis claims that Gemini’s demand for repayment of previous loans was unjust, especially given that it occurred while Genesis was in financial distress.