The Gemini exchange withdrew $282 million from Genesis Global Capital several months before the crypto lending platform declared bankruptcy. Writes about this Bloomberg with reference to knowledgeable sources.
The firm of the Winklevoss brothers is trying to get $1.1 billion back through the court. Genesis incurred a debt to Gemini clients under the Earn program. It allowed exchange users to receive profitability on digital assets lent to the platform.
The mentioned $282 million became a reserve to ensure that customer requirements are met.
On November 16, 2022, Genesis Global Capital froze the withdrawal of funds and the issuance of new loans. The firm cited “increased demands” from clients following the collapse of FTX.
The source of difficulties was the collapse of a hedge fund 3AC in July of the same year. The latter did not fulfill his obligations to Genesis Global Capital for $2.36 billion. The company was supported by its parent DCG.
In January 2023, Genesis Global Holdco and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to media reports, their liabilities exceed $3 billion. This amount includes claims from clients of the Gemini exchange for $900 million.
Source: Cryptocurrency
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