- Crypto exchange Gemini is proposing a recovery path for Genesis and DCG to recover its customers’ funds.
- Genesis suspended withdrawals last month freezing $900 million worth of assets belonging to crypto exchange Gemini.
The contagion spread by the collapse of the crypto exchange FTX has sent shockwaves all across the industry affecting multiple crypto businesses in the market. Following FTX’s fall, crypto lender Genesis faced massive withdrawals on the platform leaving its parent firm Digital Currency Group (DCG) in the doldrums.
The liquidity crisis faced by Genesis also impacted the crypto exchange Gemini, which was running a yield-earning program with the crypto lender. In a recent development, Gemini’s creditor committee has unveiled a plan to “provide a path for the recovery of assets”. In the announcement Gemini co-founder Cameron Winklevoss said:
Today, Houlihan Lokey presented a plan on behalf of the Creditor Committee to resolve the liquidity issues at Genesis and DCG and provide a path for the recovery of assets.
This plan is based on information received from Genesis, DCG, and their respective advisors to date. The Creditor Committee expects an initial response this week.
As said, crypto exchange Gemini partnered with Genesis last year in February 2021 to launch its Gemini Earn program. This program offered 7.4% interest on clients’ deposits. But last month, crypto exchange Gemini suspended withdrawals there freezing the funds of Gemini Earn.
Crypto lender Genesis is currently owing $1.8 billion in total to the credit group. Of this, 50%, or $900 million is owed to crypto exchange Gemini alone. In November end, Gemini said that it has been working with Genesis and DCG in order to recover customers’ funds.
Gemini Faces Data Breach
While Genesis was already trying to overcome the liquidation hurdle, the crypto exchange suffered a massive data breach last week which leaked the emails of 5.7 million customers. The leak involved Gemini customers’ email addresses and partial phone numbers.
However, crypto exchange Gemini was quick to respond to the development while adding that a third party was responsible for the leak. In its blog post, the crypto exchange noted:
Some Gemini customers have recently been the target of phishing campaigns that we believe are the result of an incident at a third-party vendor. This incident led to the collection of Gemini customer email addresses and partial phone numbers.
However, Gemini clarified that no account information or systems were impacted as a result of this third-party intervention. They also said that all of the customers’ funds and accounts remain secure and safe.
Alike other crypto exchanges that have been facing the heat of FTX’s fall, Gemini has also faced negative market sentiment. With the fall of the crypto exchange FTX, a majority of investors have been moving their funds off exchanges.