Genesis, which went bankrupt on Thursday, owes $765 million to cryptocurrency exchange Gemini. The latter intends to sue Genesis, accusing it of causing damage to 340,000 customers.
The Genesis/Gemini war is far from over. It’s no surprise: The cryptocurrency player most upset by Genesis’ bankruptcy this Thursday is Gemini exchange, founded by the Winklevoss brothers in 2015. In its bankruptcy filing, Genesis says it owes Gemini $765 million. .
It must be said that following the collapse of FTX, the honeymoon between Gemini and Genesis quickly turned into a nightmare. Gemini had found in the Genesis crypto lending platform an ideal partner to grow its customers’ money. In 2020, the two companies joined forces under the “Gemini Earn” program, which allowed Gemini customers to earn up to 8% interest by lending their cryptocurrencies to Genesis.
But shocked by the fall of FTX, Genesis suspended the ability for lenders to withdraw their cryptocurrencies on Nov. 16. As a result, Gemini was affected and had to temporarily suspend its “Gemini Earn” program. However, since the situation has not yet returned to normal, Gemini has so far requested $900 million from Genesis on behalf of its 340,000 customers who have participated in the Gemini Earn program (and whose funds are therefore locked up in Genesis). In vain.
The news of Genesis’ bankruptcy could be a new card to play for Gemini co-founder Cameron Winklevoss. In a thread posted this Friday on Twitter, the latter believes the “good news” in the bankruptcy proceedings is that Genesis will be held liable in court.
To recover the money from his clients (this time he does not cite any figure despite the 765 million dollars being public), Cameron Winklevoss evokes the possibility of bringing a legal action against Barry Silbert, the boss of the DGC (parent company of Genesis) and others who “share responsibility for the fraud that harmed over 340,000 Gemini Earn users and others duped by Genesis and its accomplices.”
For its part, the American policeman, the SEC has decided to continue the two companies, believing that the “Gemini Earn” program should have been registered with the competent authorities, in order to protect investors.
As a reminder, cryptocurrency lending platform Genesis filed for bankruptcy on Thursday, leaving more than 100,000 lenders unsure whether or not to recover their funds. The company is also over $3.5 billion in debt, with its 50 biggest creditors including French actor Coinhouse, which Gemini owes nearly $15 million.