Crypto exchange Gemini has informed its Earn users that it has terminated Genesis’ loans and, in effect, ended the yield program.
The exchange said in an email sent to its customers on Tuesday that it has terminated the Master Loan Agreement (MLA) between its users and Genesis Global Trading, Genesis’ lending arm.
“This [...] requires Genesis to return all assets outstanding in the program. Existing redemption requests are not impacted and continue to await fulfillment by Genesis,” Gemini said.
The exchange said it will prioritize returning them over $900 million stuck with Genesis and “operate with the utmost urgency.”
The loan termination is effective January 8, the exact date by which Gemini co-founder Cameron Winklevoss had asked Digital Currency Group (DCG), which owns Genesis, CEO Barry Silbert, to solve the withdrawal issues. Silbert failed to do so.
Winklevoss Beef with Silbert
Gemini co-founder Winklevoss started talking publicly about the exchange’s complicated relationship with Genesis more than a week ago when he published his first open letter to Silbert.
In the letter, Winklevoss accused Silbert of “bad faith stall tactics” related to the $900 million Genesis owes to Gemini Earn customers. Winklevoss also said that DCG and Genesis are “beyond commingled,” perhaps alluding to how business was done at FTX.
Silbert responded to Winklevoss’ letter saying that it’s all false and that Genesis has been in honest contact with Gemini.
When the January 8 deadline passed without any progress, Winklevoss published another public letter on January 10, addressing the DCG board. He accused Silbert of accounting fraud, saying that Genesis lied when it claimed that DCG absorbed Genesis’ losses related to the bankruptcy of the crypto hedge fund Three Arrows Capital.
Winklevoss said there is “no path” to finding a solution to the situation with Silbert being the CEO. He asked the board to “immediately” remove him from the company.
DCG responded by saying that Winklevoss’ latest accusations are “malicious, fake, and defamatory attacks. The conglomerate said that Winklevoss is trying to “deflect blame from himself and Gemini, who are solely responsible for operating Gemini Earn and marketing the program to its customers.”
Genesis interim CEO Derar Islim had earlier said that the lender is “committed to moving forward as quickly as possible” but cautioned that the company needs “additional time” to solve its liquidity problems.
The beef between Gemini and DCG has been intense over the last weeks. It’s unclear what’s going to happen. Thus, investors and users should keep an eye on the situation. If either of the entities goes bankrupt, that could mean more pain price-wise in the short term.
Source link: https://dailycoin.com/gemini-terminates-genesis-loans-ends-crypto-yield-program/
