Since last year, cryptocurrency exchange Gemini has launched multiple lawsuits with digital asset lender Genesis over the legal ownership of $1.6 billion of shares in Grayscale Bitcoin Trust (GBTC).。

Gemini filed suit in U.S. Bankruptcy Court for the Southern District of New York seeking to regain control of the shares to meet its obligations to its Earn project customers.。

Bankruptcy and Outage of Genesis

The dispute arose because Genesis was previously the primary lending partner for Gemini's Earn product, which allows customers to earn returns on their cryptocurrency holdings.。

However, the turmoil in the cryptocurrency industry last year, marked by the collapse of large exchange FTX, and its impact on the market as a whole, led Genesis to suspend withdrawals.。This leaves Gemini Earn's clients in trouble and investment prospects bleak。

Gemini is currently working to recover $1.6 billion in GBTC shares, which has the potential to secure and satisfy claims from all users who have suffered losses.。In a recent court filing, Gemini said: "Today, the collateral is worth nearly $1.6 billion, an amount that will fully secure and satisfy every user's claim.。The crux of the matter is Genesis' involvement, as Gemini alleges that Genesis is blocking the return of funds to these users and trying to transfer these assets to other creditor groups.。

Genesis Global is a subsidiary of the Digital Currency Group (DCG), which also controls the Grayscale Bitcoin Trust.。Genesis Global filed for bankruptcy in January, and just last month it announced it was ceasing all operations.。

The Gemini Trust was founded by twin brothers Cameron Winklevos and Tyler Winklevos。Cameron claimed that DCG's chief executive, Barry Silbert, was maliciously dragging out a resolution of the dispute, which has further heightened tensions between the two sides.。

Winklevoss brothers under scrutiny

Cameron Winklevos and Tyler Winklevos allegedly made secret withdrawals from now-bankrupt cryptocurrency lending firm Genesis 2.$8.2 billion while facing scrutiny, and the incident occurred months before the company's collapse.。

The withdrawal raises questions about the holding of the funds.。Gemini insists the withdrawn funds belong to Earn project users and are not corporate or personal funds.。

Earlier, Gemini faced other challenges, including job cuts and plummeting trading volumes, as well as more than $900 million in customer deposits frozen in the wake of Genesis's collapse.。The situation is further complicated by a legal dispute between Gemini and Genesis, with both sides accused of fraud.。Genesis has struggled with financial issues since going bankrupt and settling with FTX。