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Home Breaking News

Gemini Terminates Crypto Earn Program

BlockNews Team by BlockNews Team
January 12, 2023
in Breaking News, Business, Crypto, Media
Reading Time: 3 mins read
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  • Gemini terminates the Gemini Earn Program as the dispute with Genesis escalates.
  • The crypto firm still expects Genesis to return the $900 million in assets owed to the Earn customers terming it their “highest priority”.
  • The termination indicates the end of the relationship and partnership between Genesis Global Trading and Gemini.

Gemini, the custodian, and crypto-exchange founded by the Winklevoss twin brothers, has terminated its Gemini Earn program as the dispute with its partner, Genesis Global Trading, rises. The Earn program was designed to enable their customers to earn returns on their crypto holdings, up to 8% APY. The Gemini and Genesis relationship made the yields possible, where Genesis was the primary lending partner who loaned the assets to other institutions to earn interest.

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It is through an email that Gemini informed its clients of the termination of the program, saying:

“We are writing to let you know that Gemini—acting as an agent on your behalf—has terminated the Master Loan Agreement (MLA) between you and Genesis Global Capital, LLC (Genesis), effective as of January 8, 2023.”

Gemini also required that Genesis return the $900 million in assets it owes to the Gemini Earn clients. The email assured customers that “existing redemption requests are not impacted and continue to await fulfillment by Genesis.”

The termination date coincides with the deadline Gemini founder Cameroon Winklevoss gave in an earlier open letter, stating, “and for the final time, we are asking you to publicly commit to working together to solve this problem by January 8, 2023.”

This comes after Genesis ceased all withdrawals by Gemini customers on November 16, 2022, expressing that the sudden increase in leaves had exceeded their current liquidity.

The Dispute

The feud between Gemini’s founder and Barry Silbert, founder of Digital Currency Group (DCG), the parent company to Genesis Global Trading, results from the outstanding debt of $900 million in assets owed to Gemini customers.

When FTX collapsed, it escalated the problems of Three Arrow Capital (3AC) which had acquired a loan from Genesis. The collapse rendered 3AC unable to pay the debt, and when Genesis liquidated the collateral assets, it was not enough to pay the amount they owed.

This led to an imbalance in their books which Cameroon Winklevoss states in the open letter that Barry failed to take action to correct. He also called it an accounting fraud because Genesis recorded having received $1.1 billion in current assets from DCG when DCG offered an IOU promissory note with a ten-year maturity period, which does not qualify as a current asset. He demanded that Barry step down as CEO of DCG as he had committed fraud and was unfit to hold the position.

In response to all this, DCG called it “another desperate and unconstructive publicity stunt,” stating that Gemini was escaping the blame and responsibility they owed to the Gemini Earn customers.

Gemini, however, reiterated its accounting fraud claims in a court filing as a response to a class action lawsuit brought by Gemini Earn customers.

Tags: BusinesscryptoCrypto EarnCrypto ExchangeDCGGemini
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