Tyler and Cameron Winklevoss, the owners of the Gemini cryptocurrency exchange, reportedly carried out a significant withdrawal of about $280 million from Genesis Global. This maneuver occurred only months before the cryptocurrency lending institution implemented a drastic freeze on customer deposits.
Subsequently, it found itself entangled in the complexities of bankruptcy. Moreover, The collaboration between Genesis and Gemini resulted in the “Earn” program. This initiative allowed cryptocurrency enthusiasts to earn interest on their digital assets.
Under this program, users of the exchange owned by the Winklevoss brothers had the opportunity to extend their digital assets through Genesis.
In August 2022, Gemini executed a significant withdrawal of cryptocurrency funds from Genesis. This covert operation, revealed by an anonymous source, came to light in a New York Post exposé.
The main aim of this withdrawal was to establish a substantial reserve fund. Notably, this fund was earmarked to facilitate swift redemptions for participants in the Gemini Earn program.
Surprisingly, one of the withdrawn funds, as per sources closely acquainted with the situation, were directed to Gemini’s founders, the Winklevoss twins. Nevertheless, Both Genesis and Gemini have chosen to remain conspicuously silent. They have refrained from providing any official commentary on the ongoing story.
Following the tumultuous collapse of FTX, an event that sent shockwaves through the cryptocurrency market, Genesis took the drastic step of freezing customer withdrawals. This decision was made in response to the unprecedented turmoil in the industry
Crypto Lender’s Bankruptcy Filing Adds Complexity to Gemini, Genesis, and DCG’s Dispute Over $1.1 Billion
The subsequent legal maneuvering unfolded with Gemini filing a lawsuit against Genesis, alleging a failure to reimburse a staggering $1.1 billion owed to Earn program participants.
During the prolonged aftermath of the initial withdrawal suspension, Gemini, Genesis, and their parent company, Digital Currency Group (DCG), engaged in intricate settlement negotiations. These negotiations occasionally became public spectacles, characterized by heated disputes involving DCG’s founder, Barry Silbert, and the Winklevoss twins.
While a tentative accord appeared to be on the horizon in February, it languished in the realm of the unresolved.
Mediation efforts that ensued ultimately failed to yield a mutually acceptable settlement, leading Gemini to resort to legal action against DCG, accusing them of fraudulent activities in July.
Gemini’s lawsuit claimed it tried to end the Earn program in mid-October 2022. One of its founders met with Silbert to address insolvency concerns. A DCG spokesperson promptly dismissed the lawsuit as a mere “publicity stunt” and vehemently denied any wrongdoing.
Adding another layer of complexity to this intricate narrative, Genesis initiated a lawsuit against its parent company, DCG, in September. The purpose of this legal action was to reclaim a significant sum, surpassing $620 million, in unpaid loans.
Both Genesis and Gemini faced scrutiny from the U.S. Securities and Exchange Commission in January. This regulatory body accused the Earn program of operating as an unregistered sale of securities.