Winklevoss Twins Reportedly Withdrew $282 Million from Genesis Before Bankruptcy
According to reports, the Winklevoss twins, founders of cryptocurrency exchange Gemini, secretly withdrew over $280 million from their company’s bank, Genesis Global Holdco. This withdrawal happened just months before Genesis froze customer deposits and eventually filed for bankruptcy. The timing of the withdrawal raises questions about the twins’ knowledge of Genesis’s financial issues and their actions leading up to the collapse.
Gemini’s Fund Withdrawal
In August 2022, Gemini withdrew approximately $282 million in cryptocurrency from Genesis Global Holdco to create a reserve for facilitating quick redemptions for Gemini Earn customers. The funds did not directly benefit Gemini’s founders but were intended to support the Earn program users. Gemini had partnered with Genesis to offer customers the opportunity to earn yields on their crypto tokens through lending.
Legal Disputes after the Collapse of Genesis
After Genesis filed for bankruptcy, legal battles and negotiations ensued between Gemini, Genesis, and its parent company, Digital Currency Group (DCG). Settlement discussions unfolded publicly, including disputes between DCG’s founder, Barry Silbert, and the Winklevoss twins. In February, a preliminary agreement was reached but never finalized. Mediated discussions also failed to resolve the disputes.
In July, Gemini filed a fraud lawsuit against DCG, alleging that it tried to terminate the Earn program due to concerns about insolvency. DCG denied these claims and referred to the lawsuit as a “publicity stunt.” In September, Genesis filed a lawsuit against DCG seeking $620 million in unpaid loans. Both Genesis and Gemini were charged by the U.S. SEC in January for an unregistered offer and sale of securities through the Earn program.
Hot Take: Questions Surrounding Gemini’s Actions
The withdrawal of $282 million by the Winklevoss twins from Genesis Global Holdco just before its bankruptcy filing raises questions about their knowledge of the company’s financial troubles. While Gemini states that the funds were meant to support the Gemini Earn program, legal disputes and public disagreements between Gemini, Genesis, and DCG have complicated the situation. The fallout from Genesis’s collapse and subsequent legal battles continues, with unresolved claims and allegations between the involved parties. It remains to be seen how these disputes will be resolved and what impact they will have on the cryptocurrency industry as a whole.
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