Report: Crypto Lender Genesis Owes Gemini Customers $900 Million!
The cryptocurrency lender Genesis and its parent company Digital Currency Group (DCG) reportedly owe up to $900 Million to the customers of the New York crypto exchange Gemini, according to a report by the New York Times.
The $900M Owed
On November 16th, Genesis announced that it will be “temporarily suspending withdrawals” from its platform, citing unprecedented market turmoil as a result of the collapse of crypto exchange FTX.
We recognize how challenging this past week has been due to the impact of the FTX news. At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment.
— Genesis (@GenesisTrading) November 16, 2022
Gemini has a crypto lending product through its partnership with Genesis, which acts as its broker. Because of this partnership, Gemini is reportedly working as part of a creditors’ committee to regain the funds from Genesis and DCG, the Financial Times reported.
Genesis Seeking Emergency Funds
Earlier this month it was reported that Genesis attempted to raise an ’emergency loan’ of $1 billion from its investors due to its liquidity crunch. This emergency loan was sought for ahead of the platform suspending users’ withdrawals.
A spokesperson for Genesis had reported that the crypto lender had been “exploring all possible options amidst the liquidity crunch resulting from the FTX news.”
The crypto lender has been reeling from the effects of both the collapse and bankruptcy of FTX as well as the fall Three Arrows Capital (3AC) earlier this year, which had also caused Genesis to lose a reported $2.3 billion that it had lent to the former hedge fund.