Genesis owes $900M to Gemini’s clients, says report | The Financial Express

Genesis owes $900M to Gemini’s clients, says report

Cointelegraph further noted that the dramatic FTX collapse in November is the root cause of the problem.

Genesis owes $900M to Gemini’s clients, says report
Gemini launched its Trust Center on November 29 in an effort to win back clients' trust amid concerns about contagious spread following FTX's collapse.

According to a Financial Times article published on December 3 that cited people familiar with the situation, cryptocurrency lender Genesis and its parent company Digital Currency Group (DCG) allegedly owe $900 million to Gemini’s clients, Cointelegraph reported.

Cointelegraph further noted that the dramatic FTX collapse in November is the root cause of the problem. In collaboration with Genesis, the cryptocurrency exchange Gemini runs a programme called Gemini Earn that allows investors to earn 8% interest by lending out their cryptocurrency, including Bitcoin and stablecoins backed by fiat money.

According to the report, Gemini has established a creditor’s committee and is attempting to recover the funds from Genesis and DCG. Gemini launched its Trust Center on November 29 in an effort to win back clients’ trust amid concerns about contagious spread following FTX’s collapse. The Trust Center is a dashboard that displays metrics for funds held by Gemini and on the exchange’s behalf, Cointelegraph further noted.

However, clients of the Earn programme claimed they would regain their trust once withdrawal earnings started in the Twitter thread about the Trust Center.

In the US, the Gemini Earn programme was introduced in 2021. It was operating in more than 65 nations as of November 2022, according to the company, including recent additions like Croatia, Cyprus, Czech Republic, Denmark, Hungary, Ireland, Latvia, Liechtenstein, Portugal, Romania, Slovenia, Sweden, and others. The exchange lost up to 20% of its staff this year as a result of the ongoing bear market in cryptocurrencies, Cointelegraph further stated.

(With insights from Cointelegraph)

Also Read: Crypto meltdown a boon for bankruptcy lawyers

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First published on: 04-12-2022 at 12:00 IST