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 Winklevoss-run exchange Gemini owes $900 million
The FT reports that the centralized crypto asset exchange created by the Winklevoss brothers owes $900 million and is reportedly a debtor to Genesis Global Capital. People familiar with the matter told the FT that Gemini was trying to recover funds from Genesis and the company’s parent company, 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 November 22, 2022, The New York Times (NYT) reported that Genesis Global Capital hired a restructuring advisor. The NYT detailed that Moelis & Co. was hired by Genesis to “explore options, including possible bankruptcy,” according to three people familiar with the matter. The FT report about the issues between Genesis and Gemini indicates that FT’s sources say that Gemini is in the midst of forming a committee of creditors.
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.
The Gemini message was published on the same day that Genesis Global Capital detailed that it was pausing withdrawals and new loan originations. DCG founder Barry Silbert elaborated in a letter to shareholders on November 22 that it is important to note that Genesis’ lending arm “has 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 the industry’s leading manufacturer.”
