- Reportedly, Gemini has established a creditor’s committee seeking to recover funds.
- The problem originated with the shocking FTX crash in November.
According to a Dec. 3 Financial Times report citing people familiar with the subject. Crypto lender Genesis and its parent firm Digital Currency Group (DCG) are believed to owe $900 million to Gemini’s consumers.
Furthermore, the problem originated with the shocking FTX crash in November. In cooperation with Genesis, the cryptocurrency exchange Gemini runs a programme called Gemini Earn. Which allows users to earn 8% interest by lending out their cryptocurrency holdings (including Bitcoin and stablecoins tied to fiat currencies).
Tough Times Ahead
Moreover, days after exposing roughly $175 million locked in an FTX trading account. On November 16, Genesis claimed it had temporarily stopped withdrawals citing “unprecedented market turmoil.” However, it has been claimed that Genesis is having trouble acquiring funds for its lending section. Although the company has denied rumors of an “imminent” bankruptcy.
According to Gemini Earn’s status page, problems with deposits first appeared on November 16. Despite the availability of the Gemini exchange and the Gemini Credit Card, the product is now unavailable.
Furthermore, according to the report, Gemini has established a creditor’s committee and is seeking to recover the monies from Genesis and DCG. On November 29th, Gemini introduced the Trust Center, a dashboard displaying metrics for money held by Gemini and on the exchange’s behalf. This was done in an attempt to rebuild customers’ trust in the wake of worries of a contagion effect after FTX’s crash.
Earn programme customers, in the Twitter thread concerning the Trust Center, argued that they would re-establish trust once they began receiving withdrawal profits again. In 2021, Gemini introduced its Earn programme in the United States.
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