Cryptocurrency lender Genesis owes $900 million to Gemini customers
Another platform from the digital currency sector may have financial problems.
Cryptocurrency lender Genesis and its holding company Digital Currency Group (DCG) may owe around $900 million to Gemini customers, according to a recent report published by the Financial Times. The problem is allegedly related to the catastrophic collapse of the FTX cryptocurrency exchange.
Genesis owes $900 million to Gemini
A report published a few days ago by journalists from the Financial Times shows that another cryptocurrency platform may have significant problems related to the recent collapse of FTX. This time it's about lender Genesis and its holding company Digital Currency Group. These entities allegedly owe as much as $900 million to the well-known cryptocurrency exchange run by the Winklevoss brothers.
The information disclosed comes from people well acquainted with the whole matter. The problem that has arisen is due to the dramatic fate of the platform managed until recently by Sam Bankman-Fried.
The Gemini cryptocurrency exchange in cooperation with Genesis runs an investment product called Gemini Earn. It offers its customers the opportunity to earn interest of 8% by lending their cryptocurrencies.
On November 16 this year, the Genesis platform issued a statement that it would temporarily suspend withdrawals due to market turmoil. Moreover, it came to light that this entity has about 175 million dollars blocked in a trading account on the FTX exchange.
At the same time, Gemini Earn started having problems with deposits. This product remains unavailable, although all other Gemini services are functioning properly. The exchange has set up a special committee of creditors that is working to recover funds from Genesis and DCG.
The Gemini Earn tool was launched in 2021 in the United States. The service currently operates in over 65 countries.
Cryptocurrency winter kills more and more projects
The slump in the virtual currency market has literally had a negative impact on the entire crypto sector. Many companies had to reduce their costs, for example by reducing their own staff. The collapse of crypto giants hits other crypto-asset-focused businesses hard. This led to avalanche collapses of a number of projects.