Cryptocurrency exchange Gemini allegedly withdrew “hundreds of millions of dollars” from the now-bankrupt crypto lender Genesis several months before Genesis declared insolvency. According to anonymous sources, Gemini extracted $282 million worth of cryptocurrency from Genesis in August 2022, just five months before Genesis’s lending arm filed for bankruptcy. The withdrawn funds from Genesis were supposedly used by Gemini to establish a reserve to ensure sufficient liquidity for Gemini Earn customers to facilitate immediate redemptions. It is worth noting that Gemini’s billionaire founders, the Winklevoss twins, did not personally receive any of this money.
Genesis, owned by Digital Currency Group, attributes its downfall primarily to the collapse of the crypto exchange FTX in November 2022. On September 15, Genesis announced the cessation of its global trading services. Gemini has been opposing Genesis’s bankruptcy plan, claiming that it lacks clarity and complicates the creditors’ ability to comprehend the payment process. Gemini also argues that Genesis has made no progress in paying the creditors since the lawsuit was initially filed in January.
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