Genesis attempts to recover $689M from Gemini in new lawsuit 

There is yet another legal battle unfolding in the Gemini and Genesis saga

share

A month after both companies were hit with a lawsuit from New York Attorney General Letitia James, Genesis Global has sued Gemini Trust and associated users in an attempt to recover over half a billion dollars.

In a complaint filed in New York bankruptcy court Tuesday, Genesis Global alleges Gemini Trust received more than $689 million in withdrawals in the three months before the crypto lender filed for Chapter 11 bankruptcy. 

Gemini, the custodian and authorized agent for Earn users, was the recipient of withdrawals Earn users made during the “bank run” spurred by the spring 2022 market collapse. Up to 232,824 Earn customers pulled money from the platform, the lawsuit alleges. 

Earn was a program owned by Gemini and Genesis where customers could lend cryptoassets in exchange for interest. Under their agreement, Genesis acted as the borrower and reinvested crypto assets in order to generate yield. Gemini processed withdrawals. 

Read more: Gemini Earn users could be made whole through plan, DCG says

“As a result of these withdrawals, [Gemini] benefitted at the expense of [Genesis’s] other creditors, and continues to benefit to this day through their retention of the property [Genesis] seeks to avoid and recover here,” the complaint reads. 

Genesis filed for bankruptcy in January 2023 after the collapse of several of its counterparties, including exchange FTX

James announced her lawsuit against Gemini, Genesis and parent company Digital Currency Group (DCG) on Oct. 19. 

Read more: Gemini accuses Genesis of manipulating the voting process in FTX settlement

James’ office alleges Gemini and Genesis Capital conspired on two “fraudulent schemes” with their Gemini Earn product, resulting in investors losing more than $1 billion in November 2022 when withdrawals from the platform were suspended. DCG “coordinated” with the companies to perpetuate the scheme, the complaint alleges. Earn also constitutes an investment contract under the Howey test, James added. 

Days after the joint suit was filed, Gemini sued Genesis, alleging that the bankrupt crypto lender owes Gemini roughly $1.6 billion worth of Grayscale Bitcoin Trust (GBTC) shares.

“Genesis has repeatedly taken actions to harm Earn Users and to hinder and delay Earn Users’ recovery of their digital assets,” Gemini said in its complaint. 


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (20).png

Research

The dynamic between Ethena, Pendle and Aave exhibits a mutually-beneficial relationship, where the offerings of each business grows the top lines of every party in this exchange. Pendle sits at the intersection of YBA issuers (Ethena) and money markets (Aave), demonstrating heightened utilization rates of YBAs, where the PTs then exhibit profound utilization as collateral. YBA issuers see Pendle as a premier go-to-market venue, often underwriting incentives for liquidity on the market and solving for Pendle’s supply side, while money markets view PTs as attractive collateral types to lend against, solving for Pendle’s demand side. PTs represent a highly profitable collateral listing for Aave, with depositors maxing out the available borrow capacity. Pendle’s recent launch of Boros may now present the most material growth vector beyond what is currently exhibited on V2 markets, offering the ability to price yield, spreads, and duration risk across various points in time out into the future.

article-image

Ether-focused BitMine Immersion saw its daily trading volumes surge this week

article-image

From Ronin’s classic L2 pivot to Taiko’s based rollup and Puffer’s ultra-low-latency appchain testnet, Ethereum-aligned architectures are multiplying

article-image

The Gemini Wallet and Onchain hub are great for total beginners, but have a lot of room to grow

article-image

Airlines defend their rewards moat, Binance courts favor over breakfast, DAT fees pile up and systematic thinking

article-image

ETF flows slow, REV stagnates, Pump strikes back and Drift punches up