Gemini Withdraws $282 Million from Genesis: A Closer Look

Gemini Withdraws $282 Million from Genesis: A Closer Look

Gemini, the cryptocurrency exchange founded by Tyler and Cameron Winklevoss, has confirmed withdrawing $282 million from the bankrupt crypto lender Genesis. In a statement released on September 28, Gemini addressed a New York Post report that alleged the Winklevoss twins had secretly withdrawn over $280 million from the lender. Gemini clarified that the withdrawn funds were moved into its liquidity reserve and did not include any customer funds, completely refuting the allegations made in the report.

According to Gemini, the $282 million withdrawal was in line with the terms of the Gemini Earn Program. The program allowed the exchange to create a liquidity reserve for the benefit of its Earn users. Amidst the market turmoil in the summer of 2022, Gemini decided to increase the liquidity reserve and pulled back the funds from Genesis on August 9, 2022. Gemini asserted that this decision was made to protect its users from exposure to Genesis when the bankrupt lender halted redemptions in November of the same year.

The New York Post’s report claimed that it was unclear whether the withdrawn funds were Gemini corporate assets or part of the Winklevoss twins’ personal crypto stash. However, Gemini vehemently dismissed the allegations, labeling the report as “completely misleading.” The exchange emphasized that the withdrawn funds were solely for the benefit of its users and not for personal gain.

In response to the Post’s report, Gemini pointed out that it believes the article was a calculated attempt to bolster the reputation of Digital Currency Group (DCG) and its CEO, Barry Silbert. Gemini accused DCG of having prior knowledge of Genesis’s insolvency since 2022 but deliberately choosing not to disclose this critical information to investors. This accusation suggests a possible conflict of interest between DCG and Genesis, as DCG is the parent company of the bankrupt lender.

Gemini’s response to the New York Post’s allegations indicates the importance the exchange places on maintaining its reputation and trustworthiness. By issuing a strong denial and offering a detailed explanation of the funds’ purpose and withdrawal, Gemini aims to dispel any doubts surrounding its actions. The Winklevoss twins, well-known figures in the cryptocurrency industry, have also been implicated in the report. Their involvement adds another layer of scrutiny and attention to the situation.

Gemini’s confirmation of the $282 million withdrawal from Genesis sheds light on a contentious issue highlighted by the New York Post. The exchange’s response not only refutes the allegations made but also provides a clear justification for its actions. The accusations against DCG and its CEO introduce further complexities, suggesting potential conflicts of interest. It remains to be seen how this situation will unfold and what impact it might have on the reputation and operations of Gemini and the Winklevoss twins in the cryptocurrency space.


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