Gemini Reportedly Withdrew $280 Million From Genesis Before Crypto Lender Filed for Bankruptcy
Tyler and Cameron Winklevoss owned Gemini exchange reportedly withdrew approximately $280 million from Genesis Global just months before the crypto lender initiated a freeze on customer deposits and ultimately filed for bankruptcy.
Genesis and Gemini had jointly offered an "Earn" program that allowed customers to earn interest on their cryptocurrency holdings.
Under this program, users of the Winklevoss-owned exchange could lend their digital assets through Genesis.
In August 2022, Gemini executed a substantial withdrawal of cryptocurrency funds from Genesis, as disclosed by an anonymous source, The New York Post reported.
The funds pulled from Genesis were earmarked to establish a reserve intended to facilitate immediate redemptions for Gemini Earn program participants.
The report claims none of this withdrawn money was directed to Gemini's founders, the Winklevoss twins, citing one of the sources close to the matter.
Genesis and Gemini both have not made any comments on the story yet.
Following the collapse of FTX, which significantly impacted the crypto market, Genesis froze customer withdrawals.
In January this year, Genesis Global filed for Chapter 11 bankruptcy protection in New York. Gemini has since filed a claim in the bankruptcy court seeking $1.1 billion on behalf of its Earn program users.
Over the months following the initial withdrawal freeze, Gemini, Genesis, and its parent company Digital Currency Group (DCG) engaged in settlement negotiations, which sometimes turned public with disputes involving DCG's founder, Barry Silbert, and the Winklevoss twins.
While a tentative agreement was reached in February, it was never finalized.
Mediated negotiations that followed failed to yield a mutually agreeable settlement,
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