Cryptocurrency exchange Gemini has sued its former partner Genesis Global Capital for access to 62,086,586 shares of Grayscale Bitcoin Trust (GBTC) worth $1.6 billion.
The platform's lawyers pointed out that Genesis had previously promised to provide GBTC shares as collateral for loans to exchange users as part of the Gemini Earn program.
Gemini said that this amount fully covers and satisfies the claims of every Earn user.
"Genesis has repeatedly taken actions to harm Earn users and to hinder and delay Earn users' recovery of their digital assets," the exchange said in a statement.
In addition, Gemini believes that these issues must be resolved so that Genesis can move forward with a reasonable reorganization plan and Gemini can distribute Earn proceeds to Earn users, according to the CoinDesk portal.
It's worth noting that New York Attorney General Letisha James previously filed a lawsuit against exchange Gemini, cryptocurrency lender Genesis, investment firm DCG, and two executives: former Genesis CEO Michael Moro and DCG CEO Barry Silbert. In her lawsuit, she accused them of defrauding more than 230,000 investors out of more than $1 billion.
The standoff between Gemini and Genesis began in 2022, following the collapse of cryptocurrency hedge fund Three Arrows Capital and Sam Bankman-Fried's FTX, which indirectly led to Genesis' bankruptcy.
On November 16, 2022, Genesis Global Capital froze withdrawals and new loans, citing "high demand" from clients following FTX's collapse.
DCG promised to repay Genesis' creditors between 70% and 90% of the funds, but the latter were not satisfied with the terms of the agreement and threatened to block a bankruptcy deal with similar terms.
Recall that in September, Genesis sued DCG for $600 million in unpaid loans.
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