Gemini has formed a creditor’s committee to recoup the funds from crypto lender Genesis and its parent company Digital Currency Group (DCG).
The latest report from the Financial Times notes that troubled crypto lender Genesis Global owes more than $900 million to the clients of crypto exchange Gemini owned by the popular Winklevoss twins.
Following the collapse of the crypto exchange FTX last month, Genesis Global is facing major liquidity concerns. Two weeks ago, Genesis Global stated that they are trying to engage in constructive talks with creditors. However, if the situation doesn’t improve, it might as well end up filing for bankruptcy.
In partnership with Genesis, crypto exchange Gemini has been operating a product dubbed Gemini Earn. Via this product, Gemini gives investors the opportunity to earn 8% interest by lending out their digital assets.
Almost 20 days, Genesis announced that it would be temporarily suspending withdrawals citing “unprecedented market turmoil”. Genesis says that nearly $175 million worth of its funds have been stuck on the crypto exchange FTX as the latter filed for Chapter 11 bankruptcy. Genesis is unlikely to get access to these funds until the bankruptcy proceedings conclude. Amid the troubled times, the crypto lender has been facing severe difficulties in raising funds.
Just as Genesis suspended withdrawals on November 16, Gemini Earn started experiencing issues with deposits. This specific product from Gemini remains unavailable as of now. However, its crypto trading platform and Gemini credit cards are working fine.
Gemini Forms Creditos’ Committee to Recoup Funds from Genesis and DCG
The latest report from Financial Times notes that crypto exchange Gemini has formed a creditor’s committee to recoup the funds from crypto lender Genesis and its parent company Digital Currency Group (DCG).
Last week, in an attempt to restore clients’ trust, crypto exchange Gemini announced Trust Center. It is basically a dashboard that shows the metrics for the funds held by Gemini on the exchange’s behalf. The crypto exchange announced:
“We are pleased to announce the launch of the @Gemini Trust Center, a dashboard of metrics for the funds we hold on the Gemini platform and on your behalf, as well as other important data and information.”
However, customers of Gemini Earn are highly disappointed with the company. One of the possible customers of Gemini Earn wrote:
“Gemini will not be trusted by anyone if the EARN situation is not resolved for your customers. Do not create and market a product that has absurd risk to your customer’s funds. Not ethical for Gemini to collect fees but take no responsibility. Not good care for your customers”.
The crypto exchange has been clearly caught in the wildfire spread by the collapse of FTX.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
