Introduction
Genesis, a cryptocurrency lender, has filed a lawsuit against Gemini, a New York-based cryptocurrency exchange, to recover $6.89 million in preferential transfers. The lawsuit was filed on January 15, 2021, in the US Bankruptcy Court for the Southern District of New York.
Genesis’ Allegations
According to Genesis, the cryptocurrency lender provided a $30 million loan to B2C2, a cryptocurrency market maker. B2C2 then transferred $6.89 million to Gemini, which Genesis alleges were preferential transfers. In the lawsuit, Genesis claims that the transfers were made while B2C2 was insolvent, and that they were made with the intent to “hinder, delay, or defraud” Genesis.
Gemini’s Response
Gemini has denied the allegations, stating that it received the transfers in good faith and for value. In a statement to The Block, Gemini said, “We received the transfers in good faith and for value. We have been and will continue to cooperate with the Trustee and Genesis to resolve this matter as quickly as possible.”
US Bankruptcy Court Proceedings
The lawsuit is part of the ongoing bankruptcy proceedings of B2C2. In December 2020, B2C2 filed for Chapter 11 bankruptcy protection in the Southern District of New York. Genesis is a creditor in the bankruptcy proceedings, and the lawsuit is an attempt to recover the $6.89 million that was transferred to Gemini.
Conclusion
The lawsuit filed by Genesis against Gemini is a significant development in the ongoing bankruptcy proceedings of B2C2. The outcome of the lawsuit will have implications for the cryptocurrency lending industry, as it will establish the legal precedent for the recovery of preferential transfers in bankruptcy cases.
