The recently bankrupt Gemini exchange is demanding the Crypto lending platform Genesis and parent company Digital Currency Group to return the $900M to pay back its customers.
Genesis and Gemini were in partnership for a crypto lending product, a high-yield Earn service in which customers could receive interest by depositing cryptocurrency and also earn returns. Both platforms were deeply involved with the customer’s funds, and now Genesis owes Gemini users around $900M.
According to Financial Times, Gemini is among the creditors’ committee for Genesis as it struggles to pay back users. DCG, which actually owns the platform, is also in default of $575 million.
Overall, creditors are demanding Genesis, founded by Barry Silbert, pay them $1.2B based on a report by CoinDesk. This puts DCG in a big trial because it is also the owner of Grayscale, which had previously survived the 3AC and other firms’ insolvency.
Just recently, Binance also backed off from its investment in Genesis after FTX and Alameda went down, which had also backed the crypto lending platform with $1B funds in FTT tokens. Now, Genesis is left empty-handed and needs $1 billion.
How will Genesis and DCG return those user funds back to Gemini? With the crypto market going worse and FTX’s collapse effect on Genesis, the parent company seems to be in crisis.
According to sources, Genesis is currently working to raise support funds with Moelis & Co, an investment bank.
