More bad news for the crypto economy
•Gemini Earn users are owed $900 million by Genesis and Digital Currency Group (DCG), according to the Financial Times.
• The FT reported that Gemini is working as part of a creditors’ committee to regain the funds from Genesis and DCG.
• The Gemini Earn service has experienced severe disruption since the FTX contagion began at the start of last month.
• Gemini is now reportedly working with investment bank Moelis & Co about potential financing options according to the newspaper, and it was reported earlier this month that the lender attempted to raise $1 billion as part of attempts to avoid the “liquidity crunch” which forced it to stop withdrawals.
Gemini in the red
Gemini, the cryptocurrency exchange and custodian backed by the Winklevoss twins, is reportedly owed an estimated $900 million from Digital Currency Group (DCG) and its subsidiary Genesis. According to the Financial Times, Gemini is part of a creditors’ committee working to reclaim the funds.
The news comes at a difficult time for the cryptocurrency platform, which has been disrupted since early February when the FTX contagion began. The issue caused withdrawals on many platforms, including Gemini Earn — an interest-earning product launched in December 2020 — which was forced to stop.
According to reports, Gemini is now looking at potential options with investment bank Moelis & Co., which attempted to raise $1 billion earlier this month as part of efforts to avoid a liquidity crunch. While it remains unclear if Moelis & Co.’s plan was successful, it appears that Gemini is still actively seeking ways to regain their lost funds from DCG and Genesis.
The impact of this financial battle between Gemini and DCG will have far-reaching ramifications for both parties involved — not least of all those investors that may have had their money tied up in crypto-backed products such as Gemini Earn. It will be interesting to see where this case goes in the coming weeks and if any resolution can be reached between these two powerhouses of crypto.
Stuck in Limbo
In the meantime, it seems that Gemini’s users are stuck in limbo while they wait for answers or reparations from DCG and Genesis. Despite their attempts at securing financing through Moelis & Co., no public information has yet been released regarding how successful they were in getting access to new capital or how they plan on getting back what they are owed. What’s clear at this point is that until further news emerges, those who used Gemini Earn are going to remain uncertain about their investments and future returns on their money until some resolution can be found between these two giants of the crypto world.