Home Business Genesis owes Gemini Earn users $900 million

Genesis owes Gemini Earn users $900 million

Genesis owes Gemini Earn users $900 million

Filming for Gemini Earn is still paused due to the implosion of FTX. Not long after, Gemini also ran into liquidity problems. Now the know Financial Times report that Genesis and its parent company, the Digital Currency Group, owe $900 million to Gemini Earn.

Anonymous sources

We are not certain about this story, because the Financial Times quotes anonymous sources. Gemini used Genesis as its primary loan partner for the Earn service. On the Gemini Earn platform, users could earn returns on their crypto. Those returns ranged from 0.45 percent to 8.00 percent on an annual basis. In the end, that turned out not to be possible, because Gemini Earn is in serious trouble.

According to the Financial Times, Gemini is working to get the funds from Genesis and the Digital Currency Group. Gemini was founded in 2015 by brothers Cameron and Tyler Winklevoss, the two gentlemen who were also involved in the creation of Facebook. Gemini Earn paused filming on November 16 and since then there has been no clarity about a possible resumption.

Unparalleled market conditions

The exchange platform itself blames the problems on unparalleled market conditions. That is, they didn’t expect it to get this bad and secretly took too much risk. The problems arose after users withdrew large amounts of crypto from the platform following the collapse of FTX.

Genesis now appears to be working with investment bank Moelis & Co on potential options to keep things afloat. Earlier this month, Genesis already attempted to withdraw $1 billion from the market. That does not seem to have worked, so hopes are now pinned on other things. Genesis had an exposure of $175 million to FTX through derivatives trading.

Furthermore, the opaque relationship between Genesis, its parent company the Digital Currency Group and other parties that depend there is also not positive. The Financial Times reports that the Digital Currency Group, which also owns Greyscale Capital, owes Genesis $1.7 billion. Do you still understand?

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