Genesis Global Capital is said to owe Gemini clients $900 million, the Financial Times (FT) recently reported. According to FT sources, the exchange run by Cameron and Tyler Winklevoss is trying to recover funds from Genesis.
Genesis owes Winklevoss-operated exchange Gemini $900 million, report says
The Financial Times reported that the centralized crypto asset exchange founded by the Winklevoss brothers owed $900 million in debt, with Genesis Global Capital reportedly being the debtor. Gemini is trying to recover funds from Genesis and the company’s parent company, Digital Currency Group (DCG), people familiar with the matter told the FT.
The report further said that Genesis is still trying to raise funds from investors to ease its financial burden. While reports indicated that Genesis was trying to secure $1 billion in funding, the Financial Times detailed that it had been cut to around $500 million. The news follows a report from Barron’s author Joe Light that Genesis is reportedly being investigated by state securities regulators.
Additionally, on November 22, 2022, the New York Times (NYT) reported that Genesis Global Capital had hired a restructuring advisor. The New York Times detailed Genesis’ hiring of Moelis & Company to “explore options including potential bankruptcy,” according to three people familiar with the matter. The FT’s report on the problems between Genesis and Gemini indicated that FT sources said Gemini was in the process of forming a committee of creditors.
Last month, Gemini revealed that customers using the platform’s Earn program were unable to withdraw funds. Gemini stated on November 16, 2022: “We are working with the Genesis team to help customers redeem funds from the Earn program as quickly as possible.” Gemini insisted that customer funds on Gemini can be redeemed at any rate at a 1:1 ratio. Time and other products and services of the exchange are normal.
Gemini’s news came on the same day that Genesis Global Capital detailed its moratorium on withdrawals and new loan originations. DCG founder Barry Silbert detailed in a Nov. 22 letter to shareholders that it’s 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 assured shareholders that his company will “continue to be a leading builder in the industry.”
What do you think of the reported $900 million that Genesis owes Gemini? Let us know your thoughts on this topic in the comments section below.
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