U.S leading crypto exchange, Gemini, says redemption of EARN products is being delayed after its partner in the product, Genesis Global, paused withdrawals on its borrowing platform amid the crypto liquidity crisis.
EARN redemption requests are pending as Genesis Global suspends withdrawal
Next Gen cryptocurrency exchange and custodian Gemini announced that it could not meet customer redemption requests for EARN products within five business days. As revealed by the platform in a press release today, November 16, 2022, the delay in payment is due to the suspension of withdrawals by its official partner Genesis Global Capital LLC.
Earlier today, Gemini released a public statement saying;
“We are aware that Genesis Global Capital, LLC (Genesis) — the lending partner of the Earn program — has paused withdrawals and will not be able to meet customer redemptions within the service-level agreement (SLA) of 5 business days.”
According to the report, Gemini is working with the Genesis team “to help customers redeem their funds from the Earn program as quickly as possible.” The crypto exchange promised to provide more information on the new development in the coming days.
Also, Gemini has declared that the update does not affect any other products and services on its platform. The firm has reassured its users, stating that it is a full-reserve exchange and custodian and all customer funds held on its exchange “are held 1:1 and available for withdrawal at any time”.
Genesis’ suspension of withdrawals
Shaken by the recent collapse of the second largest crypto exchange FTX, Genesis suspended lending withdrawals last week, along with several other crypto exchange platforms in the digital asset industry. Although the firm said it had hired advisers to explore all possible options, including new funding, withdrawals have still not commenced. However, Genesis promises to deliver a plan for its lending business next week. This is not a first for Genesis’ lending business as it had previously been affected by its exposure to bankrupt crypto hedge fund Three Arrows Capital. Trading and other services at Genesis remain operational.
According to data on Gemini Earn’s website, Genesis is one of the main borrowers of Gemini Earn, a product used to generate yields for its customers. This accounts for the delay on EARN.
Gemini wrote on the new development:
“The past week has been an incredibly challenging and stressful time for our industry. We are disappointed that the Earn program SLA will not be met, but we are encouraged by Genesis’ and its parent company Digital Currency Group’s commitment to doing everything in their power to fulfill their obligations to customers under the Earn program. We will continue to work with them on behalf of all Earn customers. This is our highest priority. We greatly appreciate your patience.”