Crypto broker Genesis owes Gemini's customers $900 million - FT


FILE PHOTO: Representations of virtual cryptocurrencies are placed on U.S. dollar banknotes in this illustration taken November 28, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) -Crypto broker Genesis and its parent company Digital Currency Group (DCG) owe customers of the Winklevoss twins' crypto exchange Gemini $900 million, the Financial Times reported on Saturday.

Crypto exchange Gemini is trying to recover the funds after Genesis was wrongfooted by last month’s failure of Sam Bankman-Fried’s FTX crypto group, the newspaper said, citing people familiar with the matter.

Venture capital company Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis' crypto lending arm, Digital Currency Chief Executive Barry Silbert told shareholders last month.

Gemini, which runs a crypto lending product in partnership with Genesis, has now formed a creditors' committee to recoup the funds from Genesis and its parent DCG, the report added.

Separately, Coindesk on Sunday reported that creditor groups in negotiation with Genesis currently account for $1.8 billion of loans, with that number likely to continue to grow.

A second group of Genesis creditors, with loans also amounting to $900 million, is being represented by law firm Proskauer Rose, CoinDesk said citing a source.

Genesis and Gemini did not immediately respond to Reuters' request for comment.

Genesis has hired investment bank Moelis & Company to explore options including a potential bankruptcy, the New York Times reported last month, citing three people familiar with the matter.

Genesis Global Capital suspended customer redemptions in its lending business last month, citing the sudden failure of crypto exchange FTX.

Crypto trading platform FTX filed for bankruptcy protection in the United States on Nov. 11 in the highest-profile crypto blowup to date, after traders pulled billions from the platform in three days and rival exchange Binance abandoned a rescue deal.

(Reporting by Shubhendu Deshmukh and Rhea Binoy in Bengaluru; Additional reporting by Akriti Sharma; Editing by Toby Chopra, Christina Fincher and Diane Craft)

Article type: free
User access status:
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

   

Next In Tech News

Fakery and fraud: Energy scammers cast 'wide net' on Facebook
Apple expands testing of ‘buy now, pay later’ service to retail employees
Study: Remote working has saved employees around the world an average of 72 minutes every day
Bring dead pixels back to life with this free piece of software
Ebay to lay off 500 employees
Factbox-How to get Microsoft's new AI-enhanced Bing
Hertz has fewer Teslas in its fleet than planned
Arm CEO says firm fully committed to a market listing this year
Disney investors await CEO Iger's revival plan with results on tap
Intel, ParkerVision settle chip patent lawsuit during Texas trial

Others Also Read