March 27, 2024
Gemini vs. Genesis: Unraveling the Crypto Clash Over $282 Million
Latest Cryptocurrency News

Gemini vs. Genesis: Unraveling the Crypto Clash Over $282 Million

In response to a New York Post piece that painted the transaction in a more gloomy light, cryptocurrency exchange Gemini stated on Thursday that the company withdrew $282 million from cryptocurrency bank Genesis in August for the benefit of its clients.

According to the narrative that was released yesterday, Gemini co-founders Cameron and Tyler Winklevoss allegedly “secretly withdrew” millions of dollars in money months before Genesis halted user withdrawals, leaving Gemini Earn customers’ assets locked.

When choosing to leave Earn customers’ assets with the now-bankrupt crypto bank, the Winklevoss twins “pulled out their own money, whether that’s corporate funds or their own personal [funds],” an unidentified source told the Post.

Gemini said on Twitter that the purported disclosures are “pure fantasy” and that the $282 million removed was earned money that was shifted to a liquidity reserve. Additionally, Gemini alleged that the narrative in the Post was faked by DCG, the parent company of Genesis, and its CEO, Barry Silbert.

The liquidity reserve for Earn, according to a page about the agreement on Gemini’s website, enables the company to “more quickly fund your loan callback and withdrawal requests” by setting aside a percentage of client money intended for loans.

The document reads, “You appoint and authorize Gemini to periodically adjust such reserves.” Gemini said on Twitter that the $282 million Genesis withdrawal increased the reserve and reduced the company’s risk.

“It’s quite ironic that a decision that protected Earn users to the tune of hundreds of millions of dollars has been twisted like this,” Gemini stated, calling the article “another brazen attempt to manipulate public opinion.”

The public spat between Gemini, Genesis, and DCG over monies that belonged to Earn consumers has been contentious, and the tabloid-fueled controversy is the most recent example of it.

Gemini Earn, a tool provided by the exchange, allows its users to earn up to 8% on cryptocurrency loans made to Genesis. Genesis stopped allowing client withdrawals in the wake of FTX’s demise and eventually filed for bankruptcy in January.

The users of Earn are owed $900 million by Genesis and DCG. A repayment arrangement seemed to be struck in February after many legal threats were made, but it collapsed after DCG failed to make a $630 million payment, according to Gemini.

As part of its effort to fire Earn, Gemini filed a complaint in July against DCG and Silbert, accusing them of making “false, misleading, and incomplete representations” concerning the financial stability of Genesis.

DCG and Silbert requested the lawsuit be dismissed last month, claiming they had “virtually nothing to do with the Earn program.” Additionally, their attorneys argued that Silbert’s claims had not been properly demonstrated to be false.

The Winklevoss twins have engaged in a “Twitter-based character assassination campaign,” according to DCG and Silbert’s legal team, to deflect criticism from furious clients and successfully sway public opinion.

Image: Wikimedia Commons

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