Gemini Denies Secretly Withdrawing Funds from Genesis
Cryptocurrency exchange Gemini has refuted claims made in a New York Post article that co-founders Cameron and Tyler Winklevoss secretly withdrew $282 million from crypto bank Genesis before it collapsed. The article alleged that the Winklevoss twins left Gemini Earn customers with frozen funds while removing their own money. Gemini responded on Twitter, calling the claims “pure fantasy” and stating that the funds were actually diverted to a liquidity reserve. The exchange also accused Genesis’ parent company, DCG, and its CEO Barry Silbert of planting the story. Gemini’s website describes the liquidity reserve as a way to fund loan callbacks and withdrawals.
Background of the Dispute
The dispute between Gemini, Genesis, and DCG centers around funds belonging to Gemini Earn customers. The service allowed users to earn interest on crypto loans to Genesis. After FTX’s collapse, Genesis suspended customer withdrawals and filed for bankruptcy in January. DCG and Genesis owe $900 million to Earn users. A repayment agreement was reached in February but fell through when DCG missed a $630 million payment. Gemini filed a lawsuit against DCG and Silbert in July, accusing them of fraud and misrepresentation regarding Genesis’ financial health.
DCG and Silbert Seek Dismissal of Lawsuit
Last month, DCG and Silbert sought to have the lawsuit dismissed, claiming they had little involvement in the Earn program and that Silbert’s representations were not proven fraudulent. They accused the Winklevoss twins of engaging in a “Twitter-based character assassination campaign” to manipulate public opinion.
Hot Take: Gemini Defends Actions Amidst Ongoing Dispute
Gemini’s response to the New York Post article highlights the ongoing acrimony between the exchange, Genesis, and DCG. The exchange denies secretly withdrawing funds and asserts that the $282 million was diverted to a liquidity reserve for the benefit of its customers. Gemini portrays the article as a manipulation attempt by DCG and Silbert. The dispute over funds owed to Earn users continues, with legal threats and failed repayment agreements. As the lawsuit progresses, tensions remain high, and public opinion is being swayed by conflicting narratives.
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