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Crypto broker Genesis owes Gemini’s customers $900 million – FT
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(Reuters) -Crypto broker Genesis and its parent company Digital Currency Group (DCG) owe customers of the Winklevoss twins’ crypto exchange Gemini $900 million, the Financial Times reported on Saturday.
(Reuters) -Crypto broker Genesis and its parent company Digital Currency Group (DCG) owe customers of the Winklevoss twins’ crypto exchange Gemini $900 million, the Financial Times reported on Saturday.
Crypto exchange Gemini is trying to recover the funds after Genesis was wrongfooted by last month’s failure of Sam Bankman-Fried’s FTX crypto group, the newspaper said, citing people familiar with the matter.
Venture capital company Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis’ crypto lending arm, Digital Currency Chief Executive Barry Silbert told shareholders last month.
Gemini, which runs a crypto lending product in partnership with Genesis, has now formed a creditors’ committee to recoup the funds from Genesis and its parent DCG, the report added.
Separately, Coindesk on Sunday reported that creditor groups in negotiation with Genesis currently account for $1.8 billion of loans, with that number likely to continue to grow.
A second group of Genesis creditors, with loans also amounting to $900 million, is being represented by law firm Proskauer Rose, CoinDesk said citing a source.
Genesis and Gemini did not immediately respond to Reuters’ request for comment.
Genesis has hired investment bank Moelis & Company to explore options including a potential bankruptcy, the New York Times reported last month, citing three people familiar with the matter.
Genesis Global Capital suspended customer redemptions in its lending business last month, citing the sudden failure of crypto exchange FTX.
Crypto trading platform FTX filed for bankruptcy protection in the United States on Nov. 11 in the highest-profile crypto blowup to date, after traders pulled billions from the platform in three days and rival exchange Binance abandoned a rescue deal.
(Reporting by Shubhendu Deshmukh and Rhea Binoy in Bengaluru; Additional reporting by Akriti Sharma; Editing by Toby Chopra, Christina Fincher and Diane Craft)
A cryptocurrency is a digital or virtual currency that uses cryptography for security and operates on a technology called blockchain, which ensures transparency and prevents fraud.
A financial crisis is a situation in which the value of financial institutions or assets drops significantly, leading to widespread economic instability and loss of confidence in financial markets.
Blockchain is a decentralized digital ledger technology that records transactions across many computers in a way that ensures the security and transparency of the data.
A crypto wallet is a digital tool that allows users to store, send, and receive cryptocurrencies. It can be software-based or hardware-based, providing varying levels of security.
Investment portfolios are collections of financial assets such as stocks, bonds, and real estate held by an individual or institution, aimed at achieving specific financial goals.
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