December 11, 2023

Gemini announces termination of agreement with Genesis Global Capital and closure of Earn program

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Gemini announces termination of agreement with Genesis Global Capital and closure of Earn program

Gemini cryptocurrency exchange announcedon termination of the loan agreement with Genesis Global Capital (GGC) and closing the Earn program, accusing its management of deceiving users.

Gemini co-founder Cameron WinklevossWinklevoss tweeted an open letter to the GGC Board of Directors, accusing its subsidiary Genesis of defrauding more than 340,000 Gemini users and members of the Earn program, which offered 7.4% interest on customer deposits. Winklevoss alleges that Digital Currency Group (DCG) CEO Barry Silbert and other senior executives at the crypto lender made false statements about Genesis' solvency and financial position.

This was done in order to convince Gemini andother creditors that DCG covered $1.2 billion in losses incurred by Genesis after providing a $2.36 billion loan to cryptocurrency hedge fund Three Arrows Capital, which went bankrupt in June 2022, Winklevoss said in the letter. Therefore, the billionaire called on the DCG board of directors to remove Silbert from his position as CEO, since he is unable to effectively manage the venture company.

Gemini also said it will devotepriority is given to the return of client funds and is ready to act as quickly as possible. The exchange sent notice to GGC that it was terminating the loan agreement and ending the Earn program. Winklevoss stated that Genesis is obligated to return all crypto assets involved in the program.

Silbert responded to Winklevoss's accusations,noting that DCG never pooled funds with any of its subsidiaries and DCG's relationship with Three Arrows Capital was limited to a credit and trading agreement. Three Arrows Capital has separately invested in a number of Grayscale products, Silbert said.

Recall that in November, after the collapse of the FTX exchange, Genesis suspended the withdrawal of funds from the Earn program, and in December, Gemini offered Genesis and DCG a plan to return client funds.