Crypto Broker Genesis Owes Gemini Clients $900 Million, Financial Times Reports
(Reuters) – Crypto broker Genesis and its parent company Digital Currency Group (DCG) owe clients of twin crypto exchange Winklevoss Gemini $900 million, the Financial Times reported on Saturday.
Crypto exchange Gemini is trying to recover the funds after Genesis was caught off guard by last month’s failure of Sam Bankman-Fried’s FTX crypto group, the paper said, citing people familiar with the matter. .
Venture capital firm Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis’ crypto lending arm, the CEO of Genesis said last month. Digital Currency, Barry Silbert, to shareholders.
Gemini, which operates a crypto lending product in partnership with Genesis, has now formed a creditors’ committee to recover funds from Genesis and its parent company DCG, the report adds.
Genesis and Gemini did not immediately respond to Reuters request for comment.
Genesis has hired investment bank Moelis & Company to explore options, including possible bankruptcy, The New York Times reported last month, citing three people familiar with the matter.
Genesis Global Capital suspended client redemptions in its lending business last month, citing the sudden failure of crypto exchange FTX.
Crypto trading platform FTX filed for bankruptcy protection in the United States on November 11 in the most publicized crypto explosion to date, after traders withdrew billions from the platform in three days and rival exchange Binance dropped a bailout deal.
(Reporting by Shubhendu Deshmukh and Rhea Binoy in Bengaluru; Editing by Toby Chopra and Christina Fincher)
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