Genesis went bankrupt months after Gemini reportedly withdrew $282M in crypto

September 28, 2023 at 2:44 pm

Edited by Dalmas Ngetich

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Genesis went bankrupt months after Gemini reportedly withdrew $282M in crypto

Gemini Trust Co., a crypto exchange, reportedly withdrew $282 million from Genesis Global Holdco LLC months before Genesis filed for bankruptcy.

Genesis and Gemini used to work together on the Earn program. Under this initiative, Gemini allowed users to lend crypto via Genesis and earn returns.

This partnership appeared mutually beneficial until Gemini withdrew millions from Genesis.

Anonymous sources disclose that Gemini withdrew approximately $282 million from Genesis to establish a financial reserve, ensuring swift access to funds for Gemini Earn users.

Importantly, none of these funds went into the personal accounts of the Winklevoss twins, despite some speculations.

Following the collapse of FTX, Genesis froze customer withdrawals and filed for Chapter 11 bankruptcy.

In response, Gemini initiated a claim in bankruptcy court, advocating for a $1.1 billion settlement for Earn users.

1/ It’s disappointing that the @SECGov chose to file an action today as @Gemini and other creditors are working hard together to recover funds. This action does nothing to further our efforts and help Earn users get their assets back. Their behavior is totally counterproductive.
— Tyler Winklevoss (@tyler) January 12, 2023

Negotiations for a settlement involving Genesis, Gemini, and Digital Currency Group (DCG) have been unproductive. Public disputes have erupted between DCG founder Barry Silbert and the Winklevoss twins.

Although a tentative agreement was proposed in February, it fell apart, stalling mediation talks.

In July, Gemini escalated the situation by filing a fraud lawsuit against DCG.