Report: Crypto lender Genesis allegedly owes $900M Gemini’s clients
This issue is linked to the Gemini Earn program which offers 8% interest on crypto lending. It is operated in partnership by Gemini and Genesis. News Collect this piece of crypto history. According to a Financial Times report, December 3, citing people familiar with this matter, Genesis, NFTCrypto lender and its parent company Digital Currency Group(DCG), allegedly owes $900million to Gemini’s clients. The issue stems from the November FTX collapse. Gemini, a crypto exchange, offers investors the chance to earn 8% interest by lending their crypto, including Bitcoin, and stablecoins that are pegged to fiat currencies. Genesis announced that withdrawals were temporarily suspended due to “unprecedented markets turmoil” days after disclosing approximately $175 million in funds in an FTX trading accounts. Genesis is reportedly having difficulty raising funds for its lending unit. However, it refuted speculations of an imminent bankruptcy. Gemini Earn also started experiencing problems with deposits on Nov. 16. The product is still unavailable at the time this article was written. However, all other Gemini services including the exchange trading engine, and the Gemini Credit Card, remain available. Gemini has established a creditor’s panel and is working to recover funds from Genesis, DCG, according to the report. Gemini has established a creditor’s committee to try and restore clients’ trust following fears of contagious spread from FTX’s collapse. Don’t market a product that poses an unreasonable risk to customer funds. Gemini should not be allowed to collect fees, but assume no responsibility. It is not ethical for Gemini to collect fees but take no responsibility for your customers. – Clint (@Az78Clint), November 30, 2022
In the United States, Gemini’s Earn program launched in 2021. According to the firm, it was operating in over 65 countries as of November 2022. The ongoing crypto bear market caused the exchange to lose up to 20% of its staff. Cointelegraphs reached out to Genesis and Gemini for comment but they did not respond immediately.