Gemini Withdrew $282 Million from Genesis Before Bankruptcy
Months before the bankruptcy of Genesis, the crypto lender, Gemini, owned by the Winklevoss twins, withdrew millions of dollars from Genesis, according to anonymous sources. In August 2022, Gemini withdrew approximately $282 million in cryptocurrency from Genesis to establish a reserve for Gemini Earn customers. The funds were not directed to the Winklevoss twins themselves.
Frozen Withdrawals, Bankruptcy Filings, and Ongoing Feuds
Genesis froze customer withdrawals shortly after FTX’s collapse in November 2022. The company later filed for Chapter 11 bankruptcy protection in January. Initially, Genesis, DCG (Digital Currency Group), Gemini, and other creditors reached a bankruptcy agreement to recover assets. However, the agreement did not materialize.
In July, Gemini sued Genesis, DCG, and founder Barry Silbert for “fraud against creditors,” seeking around $1.1 billion of assets stuck on Genesis. This sparked a probe by the FBI and SEC into DCG. The SEC had previously charged Gemini and Genesis in January over an alleged unregistered securities offering related to the Earn program.
DCG’s Proposed Creditor Agreement
DCG recently proposed a new creditor agreement in Genesis’ bankruptcy case that could allow Gemini Earn users to recover all their crypto. The proposed agreement offers unsecured creditors a 70-90% baseline recovery with a significant portion in digital currencies. However, Gemini Earn users could receive up to 110% of their claim due to the GBTC shares collateral posted by Genesis. DCG criticized Gemini for not contributing financially to ensure a better recovery for its users.
Hot Take: The Winklevoss Twins’ Controversial Involvement in Genesis’ Bankruptcy
The involvement of the Winklevoss twins’ exchange, Gemini, in the bankruptcy of Genesis has raised questions and fueled ongoing feuds. With accusations of fraud and a probe by authorities, the battle between Gemini and Genesis continues. The proposed creditor agreement offers hope for Gemini Earn users to recover their assets, but the dispute between DCG and Gemini highlights the complexities of the situation. As the bankruptcy case unfolds, it remains to be seen how the involvement of these prominent crypto figures will impact the resolution.
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