Billionaires Tyler and Cameron Winklevoss recently lent $100 million of their own money to help crypto exchange Gemini Trust Co. run its business, which is struggling due to the market downturn. Bloomberg informed. The move by the Gemini founders came as the company was struggling to obtain funding from outside investors.
He Sam Bankman-Fried FTX Collapse It resulted in the bankruptcy of cryptocurrency lender Genesis Global, which in turn affected Gemini, as Genesis was Gemini's partner in the Gemini Earn lending product. Genesis froze withdrawals in November 2022. Consequently, Gemini was forced to stop redemptions on Earn accounts. Funds worth $900 million were stranded in this matter, prompting a dispute between the Winklevoss brothers and Barry SilbertCEO of Digital Currency Group, parent company of Genesis.
In February, the two parties reached an agreement to resolve the dispute, under which Gemini would contribute up to $100 million. The aforementioned loan is reportedly not part of this deal.
Growing problems for Gemini
Both Gemini and Genesis have been sued by the Securities and Exchange Commission (SEC) for alleged violations of securities law, as they sold unregistered securities to retail investors through the Earn product. Tyler Winklevoss said on Twitter that the Earn program was regulated by the New York Department of Financial Services and that they had been in talks with the SEC about Earn for over a year and a half.
He maintained that the SEC had no problem with the Earn program until the withdrawals stopped last year. "We look forward to defending ourselves against this fabricated parking ticket," Winklevoss said, calling the SEC's action "totally counterproductive."
Amid all this chaos, Gemini COO Noah Perlman has left the company to take on the role of chief compliance officer at major cryptocurrency exchange Binance. Citing CryptoCompare, Bloomberg noted that Gemini's market share of global spot trading volume has declined to 0.13% from 0.20% a year ago.
