Gemini, Genesis, and DCG Outline BTC and ETH Stimulus Plan – Is the Crypto Market Safe Now?

  • Crypto exchange Gemini offers a recovery route to Genesis and DCG to recover funds from its customers.
  • Genesis suspended withdrawals last month, freezing $900 million in assets belonging to crypto exchange Gemini.

The contagion spread by the collapse of crypto exchange FTX has sent shockwaves throughout the industry, affecting several crypto companies in the market. After the fall of FTX, the Genesis crypto lender faced a huge withdrawals on the platform, leaving its parent company Digital Currency Group (DCG) in the doldrums.

The liquidity crunch Genesis faced also impacted crypto exchange Gemini, which ran a yield program with the crypto lender. In a recent development, Gemini’s creditors’ committee unveiled a plan to “provide a pathway for asset recovery.” In the announcement, Gemini co-founder Cameron Winklevoss said:

Today, Houlihan Lokey presented a plan on behalf of the Creditors’ Committee to address liquidity issues at Genesis and DCG and provide a pathway for asset recovery.

This plan is based on information received from Genesis, DCG and their respective advisors to date. The creditors’ committee is expecting a first response this week.

As noted, crypto exchange Gemini partnered with Genesis last year in February 2021 to launch its Gemini Earn program. This program offered 7.4% interest on customer deposits. But last month, crypto exchange Gemini suspended withdrawals there, freezing Gemini Earn funds.

Crypto lender Genesis currently owes the credit group a total of $1.8 billion. Of this amount, 50%, or $900 million, is due to the Gemini crypto exchange alone. In late November, Gemini said he had been work with Genesis and DCG to recover client funds.

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Gemini faces a data breach

With Genesis already trying to overcome the liquidation hurdle, the crypto exchange suffered a massive data breach last week that leaked the emails of 5.7 million customers. The leak involved partial email addresses and phone numbers of Gemini customers.

However, crypto exchange Gemini was quick to react to the development while adding that a third party was responsible for the leak. In his blog postthe crypto exchange noted:

Some Gemini customers have recently been the target of phishing campaigns which we believe are the result of an incident at a third-party vendor. This incident led to the collection of partial email addresses and phone numbers of Gemini customers.

However, Gemini clarified that no account or system information was affected as a result of this third-party intervention. They also stated that all customer funds and accounts remain safe and secure.

Like other crypto exchanges that faced the heat of FTX’s fall, Gemini also faced negative market sentiment. With the fall of the FTX crypto exchange, a majority of investors moved their funds off the exchanges.

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