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Replacing 2-prong outlets in basement – existing wiring has two hot wires, one neutral?

I’m replacing the two-pronged outlets in my basement with 3-pronged grounded outlets in the United States (Illinois). All the wiring is in metal conduit with metal conduit boxes, which are grounded to the breaker box (I checked with a multimeter from the hot slot to the metal box). My goal is to wire all the 3-pronged outlets grounded to the metal conduit boxes, with a GFCI at the outlet closes to the breaker box (which I believe is proper code for a basement).

The metal conduit has three wires running through it: a red and a black, which are both hot, and a white, which is neutral – I tested all these with a multimeter at different outlets. These outlets are all daisy-chained together, sharing a neutral white wire, but powered by the different red or black wires.

To further clarify, the red and black wires are not in a series daisy chain (to my eyes and testing). When I opened the circuit breaker box, both the red and the black wires had their own breaker switches, but the wires ran through the same conduit.

At first I thought this was just weird, but chocked it up to odd 1960’s construction, or my own lack of knowledge.

But, it is causing issues: when I plug something in downstream of the GFCI (powered by black) in an outlet powered by red, the GFCI trips, so I can’t use those outlets.

I was using a used GFCI outlet (bought at a secondhand construction materials store) – I bought a new one in case it is the outlet’s fault, but haven’t yet tried to install it.

Also note that the breaker isn’t set up for 240V supply; there are no appliances in the house running 240V (we have natural gas).

I drew a picture which I hope helps illustrate my description better. There is either a red or a black box around the outlets to show which color hot wire they are being powered by.

Diagram of wiring

Thanks for looking! I am an electrical layman but could provide more info/investigate further if needed!

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