Genesis Crypto News: Genesis Allegedly Owes Gemini’s Clients $900 Million

 

Linked to this offering is Gemini and Genesis’s Gemini Earn program, via which crypto lenders can earn 8% per annum.

 

On December 3rd, the Financial Times reported, citing people familiar with the case, that Gemini customers were owed $900 million by cryptocurrency lender Genesis and its parent firm, Digital Currency Group (DCG).

 

The problem originated with the FTX‘s shocking decline in November. Gemini, a cryptocurrency exchange, has partnered with Genesis to launch a product called Gemini Earn, through which cryptocurrency holders (such as Bitcoin and stablecoins tied to fiat currencies) can lend their assets out and earn 8% annual interest.

 

Days after exposing roughly $175 million locked in an FTX trading account, on November 16, Genesis claimed it had temporarily stopped withdrawals citing “extraordinary market turbulence.” Despite reports that Genesis is having trouble raising capital for its loan unit, the company has denied rumors of a “imminent” bankruptcy.

 

 

 

 

According to Gemini Earn’s status page, problems with deposits first appeared on November 16. However, the Gemini Exchange Trading Engine and the Gemini Credit Card, along with all other Gemini services, are still accessible at this time.

 

According to the article, Gemini has established a creditors’ committee to pursue reimbursement from Genesis and DCG. On November 29th, Gemini introduced its Trust Center, a dashboard displaying metrics for money held by Gemini and on the exchange’s behalf. This was done in an effort to regain clients’ trust in the wake of fears of a contagion effect following FTX’s decline.

 

On the other hand, Earn program customers said they would re-establish confidence if they started making money again through the withdrawal system, as discussed in a Twitter thread concerning the Trust Center.

 

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.

— Clint (@Az78Clint) November 30, 2022

 

In 2021, Gemini introduced its Earn program to the US. Croatia, Cyprus, Czech Republic, Denmark, Hungary, Ireland, Latvia, Liechtenstein, Portugal, Romania, Slovenia, and Sweden are among the additional territories the company works in as of November 2022. Due to the prolonged cryptocurrency bear market, the exchange has had to lay off as much as 20% of its workforce this year.

 

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