2023-09-30 14:03:05
The founders of the Gemini crypto exchange, the Winklevoss twins, allegedly secretly withdrew more than $280 million from Genesis Global Holdco. This was months before the lender froze deposits and filed for bankruptcy. This raises questions about whether the brothers were aware of Genesis’ financial problems and their actions leading up to the collapse. Gemini Withdraws $282 Million According to a report, Gemini withdrew about $282 million in cryptocurrency from Genesis Global Holdco, just months before the latter froze customer deposits and eventually filed for bankruptcy. Genesis and Gemini have jointly offered their customers the opportunity to earn a return on their crypto token investments through the Gemini Earn program. This program allowed users of Gemini, owned by the Winklevoss twins, to lend their crypto assets through Genesis. Gemini withdrew funds from Genesis in August 2022 to create a reserve to facilitate quick redemptions for Gemini Earn customers. It is important to emphasize that the withdrawn funds did not directly benefit the founders of Gemini. Following the collapse of FTX, Genesis temporarily halted customer payments and eventually filed for bankruptcy protection in January. In response, Gemini filed a legal claim seeking $1.1 billion on behalf of Earn program users in bankruptcy proceedings. Legal disputes after the collapse of Genesis However, the following months were marked by numerous legal battles and trials. Gemini, Genesis and its parent company, Digital Currency Group (DCG), have often been embroiled in public controversies. Among others, DCG’s founder, Barry Silbert, and the Winklevoss twins had heated arguments several times. A preliminary agreement was then reached in February, but it was never finalized. Further attempts at mediation later did not lead to results either. In July, Gemini then sued DCG, accusing them of fraud. According to the lawsuit, Gemini tried to terminate the Earn program in mid-October 2022. One of the founders met with Silbert to discuss insolvency concerns. The DCG denied these allegations, calling the lawsuit a “publicity grab” and denying its guilt. In September, Genesis also filed a lawsuit against its parent company, DCG, claiming unpaid loans of 620 million dollars. DCG chose not to comment on the Gemini withdrawal. In January, both Genesis and Gemini were charged by the US SEC, which alleged that they offered unregistered offers and sales of securities under the Earn program. Tyler Winklevoss publicly criticized these allegations on social media.
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