Key Takeaways
- The brothers reportedly provided the loan to Gemini after failing to get outside investment for the exchange.
- The $100 million loan Winklevoss has lent to Gemini is notable as it equals the amount Gemini agreed to give some of its Earn customers under the Genesis bankruptcy case
Recently, the unfavorable crypto market conditions have forced several crypto firms and exchange to file for bankruptcy. To shore up liquidity and prevent a potential bankruptcy, the famous Winklevoss brothers- Tyler and Cameron Winklevoss have lent their Gemini cryptocurrency exchange $100 million to support the business.
The Bloomberg report citing anonymous sources, states that the brothers provided the loan to Gemini after failing to get outside investment for the exchange.
The latest development also comes amid Gemini facing the brunt of a regulatory crackdown. Earlier this year, the United States Securities and Exchange Commission charged crypto lending firm Genesis Global Capital and crypto exchange Gemini for offering unregistered securities through Gemini’s “Earn” program.
The SEC complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains as well as prejudgment interest, and civil penalties. SEC states that it is probing other securities law violations from other entities relating to the Gemini Earn program. New York State’s Department of Financial Services is also probing Gemini over claims that the firm made regarding assets in its Earn lending program.
Gemini’s earn programme, which allowed users to deposit their cryptocurrencies and receive yields of between 0.45% and 8% percent, akin to a bank account, has been the subject of a public dispute between Gemini and Genesis.
Genesis halted withdrawals in November , leading users and Winklevoss brothers to threaten legal action against the firm and DCG founder Barry Silbert, demanding that Genesis offer a plan for repaying the $900 million loan Gemini made to the now-bankrupt Genesis Global.
Recently, an agreement has been reached between DCG, Gemini, and Genesis, which includes Gemini contributing up to $100 million more for Earn users. Under the deal, DCG will also exchange a $1.1 billion note for stock and refinance $1 billion in loans.
The $100 million loan Winklevoss has now lent to Gemini stands is notable as it equals the amount Gemini agreed to give its Earn customers under the Genesis bankruptcy case.
