December 11, 2023

Gemini Forms Creditor Committee With Houlihan Lokey To Address Genesis Liquidity Problems

The Financial Times (FT) reported thatGenesis Global Capitalowes Gemini customers $900 million.Sources of the publication noted that the exchange is trying to return these funds by creating a committee of creditors.

31 days after Gemini suspended program withdrawalsEarn, the exchange has formed a committee, whose financial advisor isHoulihan Lokey. Houlihan Lokey – service companyfinancial services and independent investment bank that operates one of the world's largest financial restructuring practices. Gemini hopes to “provide a path for refunds” with the help of a newly created committee of creditors and counsel Houlihan Lokey.

December 17, 2022 Gemini co-founder CameronWinklevoss tweeted an update on the Earn program. “Earn Update: Houlihan Lokey, financial advisor to the creditors' committee, has begun advocating for a plan to address Genesis and DCG's liquidity issues and provide a path to recover funds”, – Winklevoss said.

Crypto exchange suspends Earn 16 programNovember 2022 and reported that the company's lending partner Genesis Global Capital had also suspended withdrawals. “We are working with the Genesis team to help clients withdraw their funds from the Earn program as quickly as possible”, – Gemini said at the time.

Genesis suffered from the defeat of FTX, and one ofdivisions of the company received a seat on the official committee of creditors in the FTX bankruptcy case. Genesis was also seeking $1 billion in funding from investors, sources told the FT and the Wall Street Journal (WSJ). Winklevoss' tweet on Saturday also noted that the committee was in its early stages. “These are still early stages and discussions are ongoing, however we will update you as soon as more information becomes available”, – Winklevoss said.

In addition to Gemini's issues with the Genesis,the company also suffered a database breach. Sources said that 5.7 million Gemini user email addresses and partially redacted phone numbers had been leaked, with some reports noting that the files were posted on hacker forums.