According to a recent report from the Financial Times (FT), Genesis Global Capital allegedly owes $900 million to Gemini customers. The exchange operated by Cameron and Tyler Winklevoss is attempting to recover the funds from Genesis, according to FT’s sources.
Report Claims Genesis Owes the Winklevoss-Operated Exchange Gemini $900 Million
FT reports that the centralized crypto asset exchange created by the Winklevoss brothers is owed $900 million and reportedly Genesis Global Capital is the debtor. People familiar with the matter told FT that Gemini was in the process of trying to recover the funds from Genesis and the company’s parent firm Digital Currency Group (DCG).
The report further alleges that Genesis is still attempting to solicit funds from investors to ease financial burdens. While reports noted that Genesis was trying to get $1 billion in funding, FT details that it’s been cut down to roughly $500 million. The news follows the report published by Barron’s author Joe Light that noted Genesis is reportedly being probed by state securities regulators.
Furthermore, on Nov. 22, 2022, the New York Times (NYT) reported that Genesis Global Capital hired a restructuring adviser. NYT detailed that Moelis & Company was hired by Genesis to “explore options including a potential bankruptcy,” according to three people familiar with the matter. FT’s report about the issues between Genesis and Gemini indicates that FT’s sources say Gemini is in the midst of creating a creditors’ committee.
Last month, Gemini revealed that customers using the platform’s Earn program could not withdraw funds. “We are working with the Genesis team to help customers redeem their funds from the Earn program as quickly as possible,” Gemini said on Nov. 16, 2022. Gemini insisted that customer funds on Gemini could be redeemed at a 1:1 rate at any time and the exchange’s other products and services were normal.
Gemini’s message was published the same day Genesis Global Capital detailed that it was pausing withdrawals and new loan originations. DCG founder Barry Silbert detailed in a letter to shareholders on Nov. 22 that it was important to note the lending arm of Genesis has had “no impact on Genesis’ spot and derivatives trading or custody businesses, which continue to operate as usual.” Silbert also reassured shareholders that his firm will “continue to be a leading builder of the industry.”
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