Crypto exchange Gemini has initiated a lawsuit against digital asset lender Genesis in a bid to gain control of its $1.6 billion Grayscale Bitcoin Trust stake.

The lawsuit, filed Friday in U.S. Bankruptcy Court for the Southern District of New York, aims to recover shares to repay Gemini's Earn program clients.

Gemini and Genesis have been embroiled in a dispute since last year when Genesis served as the primary lending partner for Gemini's Earn product.

The Earn program allows customers to earn profits on their cryptocurrency holdings. However, following the collapse of major crypto exchange FTX and subsequent industry turmoil, Genesis stopped withdrawals, leaving Earn customers uncertain about the fate of their funds.

Gemini aims to take funds and fulfill its obligations to its clients.

The lawsuit highlights that the guarantee, which now totals nearly $1.6 billion, will fully secure and satisfy the claims of all Earn users.

The main obstacle in this process, according to Gemini, is Genesis.

In a blog post discussing the lawsuit, Gemini stated that Genesis obstructed efforts to compensate Earn users and attempted to shift the value to another group of creditors.

Genesis is a company under the umbrella of the Digital Currency Group (DCG), which also controls the Grayscale Bitcoin Trust, the world's largest Bitcoin fund.

"Genesis has repeatedly taken actions to the detriment of Earn users and hindered and delayed the recovery of their digital assets by Earn users," said the content of the lawsuit.

“It is time to resolve these issues so that Genesis can move forward with a reasonable reorganization plan and Gemini can distribute the proceeds from the collateral to Earn users.”

Genesis Global, a subsidiary of DCG, filed for bankruptcy in January and recently announced it was ceasing all operations.

Last month, the New York Attorney General's office sued DCG, Genesis Global Capital, and Gemini Trust, alleging that the companies defrauded customers of $1.1 billion.

Gemini Trust, founded by Cameron and Tyler Winklevoss, prominent figures in the crypto space, accused DCG CEO Barry Silbert of using “bad faith tactics” to delay resolution of the ongoing dispute.