Crypto lender Genesis reportedly owes nearly $1 billion to the customers of crypto exchange Gemini due to the collapse of FTX.
According to a new report by the Financial Times, anonymous sources familiar with the matter say that Gemini is attempting to recover the funds from Genesis after the crypto broker was affected by FTX, a crypto exchange that declared bankruptcy last month.
Previously, Genesis and Gemini had formed a partnership to create Gemini’s Earn program, which allowed retail investors to loan out their digital assets to earn interest.
Last month, Gemini was forced to halt customer withdrawals from the Earn program when Genesis faced liquidity issues.
In an attempt to remedy the situation, Genesis has hired an outside banking firm to help the lender explore all of its options, while Gemini formed a creditor’s committee as a means of recouping the funds, according to the report.
The report also finds that Gemini’s committee is currently in talks with both Genesis and Digital Currency Group (DCG), the crypto lender’s parent company. According to the report, DCG owes Genesis a total of $1.7 billion in loans.
One unnamed source told the Financial Times that due to the entanglement of obligations, Genesis and DCG are negotiating together with creditors.
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Willyam Bradberry/Sensvector
