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Gemini to put $100 million toward Genesis’ bankruptcy recovery plan

  • February 22, 2023

Crypto exchange gemini-to-contribute-100-million-to-genesis-bankruptcy-recovery-plan.html?&qsearchterm=gemini”Gemini will contribute $100 million in cash to a recovery plan for the bankrupt crypto lender Genesis Global Capital and its parent company, Digital Currency Group, the lender’s lawyers said in a court hearing Monday.

Gemini, founded by twins Cameron and Tyler Winklevoss, said it would keep aside the funds for users of its now-defunct Earn product. The 340,000 affected users had around $900 million of assets frozen when Genesis ceased withdrawals in November amid market volatility prompted by the bankruptcy of crypto exchange FTX. Genesis filed for bankruptcy last month.

“This plan is a critical step forward towards a substantial recovery of assets for all Genesis creditors,” Gemini told users in correspondence seen by CNBC. This shows “Gemini’s continued commitment to helping Earn users achieve a full recovery.”

The Winklevoss brothers had publicly blamed DCG’s Barry Silbert in the stranding of user funds. Gemini terminated Earn, a product that promised returns up to 8% on customer deposits, on Jan. 8. The Securities and Exchange Commission charged Genesis and Gemini with selling unregistered securities through Earn days later.

Gemini CEO Tyler Winklevoss, at the time, termed the SEC’s action “disappointing” and said it “does nothing to further our efforts and help Earn users get their assets back.”

The deal involving Genesis, DCG, Gemini, and all of Genesis’ creditors is aimed at refinancing the $500 million worth of cash and bitcoin that Genesis loaned to DCG to fund Silbert’s venture investments.

Genesis faced rough water since last July, when crypto hedge fund Three Arrows Capital defaulted on a $2.4 billion loan from the firm following the collapse of the Terra ecosystem. DCG issued a $1.1 billion promissory note to Genesis for 3AC’s collapse.

The Winklevoss twins criticized the move as “a complete gimmick that did

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