Key Takeaways:
- Customers of cryptocurrency exchange Gemini are indebted $900 million by cryptocurrency brokerage Genesis.
- The Winklevoss brothers’ exchange is intended to recoup the money from Genesis.
According to the Financial Times, crypto broker Genesis and its parent company Digital Currency Group (DCG) ended up owing $900 million to clients of the Winklevoss twins’ cryptocurrency exchange Gemini.
As per sources familiar with the situation, Gemini is trying to retrieve the finances from Genesis and the company’s parent company, Digital Currency Group (DCG).
As stated in the article, Gemini, which operates a crypto lending product in collaboration with Genesis, has now established a creditors’ working group to pay back the money from Genesis and its parent DCG.
According to the report, Genesis is still trying to secure funds from investors in order to alleviate economic burden. While previous reports stated that Genesis was seeking $1 billion in funding, the Financial Times reports that it has been reduced to approximately $500 million.
Genesis is among the collaborators in Gemini’s Earn programme, which allows users to lend out their cryptocurrency in exchange for rewards. Genesis had earlier this month temporarily shut down withdrawal effects due to volatile market conditions; as a result, the cryptocurrency exchange stopped redemptions from this program.
The New York Times reported last month that investment bank Moelis & Company has been appointed by Genesis to investigate possibilities, including a prospective bankruptcy.
The unexpected collapse of the cryptocurrency exchange FTX was cited as the reason Genesis Global Capital last month stopped customer redemptions in its lending business.
There were rumors that Binance was thinking about purchasing Genesis‘ loan book in mid-November. According to speculations, CZ was looking over Genesis’ balance sheet and gathering more details. A report from the third quarter of 2022 shows that Genesis Trading has active loans worth $2.8 billion.
Genesis Global Capital, a troubled cryptocurrency trading company, has recently been in trouble, and several U.S. state officials were recently looking into whether or not it may have broken securities laws.
According to the most recent news reports, Joseph Borg, director of the Alabama Securities Commission, said that his organisation and other US state regulators are looking into Genesis to see if the company convinced residents of their states to invest in cryptocurrency securities without obtaining any required registrations.
