Crypto bank Genesis responds to Gemini’s claim

Last Updated: 5 January 2023

Genesis Trading is a crypto company under the umbrella of Digital Currency Group. It is a spot and derivatives trading house, as well as a crypto bank and custodian, aimed at professional clients.

Update from Genesis

They got into trouble because of the bear market as well as the bankruptcy of FTX and subsidiary Alameda Research, they had a trading account with FTX.com, it is unclear how much money was lost.

Trouble is, other crypto companies also lent money back to Genesis Trading, a so-called off-chain strike product. Gemini has $900 million outstanding from their Earn product, Dutch Bitvavo is missing around $297 million (€280 million), money that customers have flagged for ‘strike’.

Gemini in particular is putting increasing pressure on parent company Digital Currency Group (DCG) to come up with a solution. Cameron Winklevoss of Gemini published an open letter on Twitter about it on Monday, harshly attacking DCG CEO Barry Silbert. They are also under pressure from their own clients, who have launched a lawsuit against Gemini.

In an update to its customers, interim CEO Derar Islim of Genesis said they need more time to bring financial order, according to a report on Bloomberg.

‘We believe we can come to a solution,’ but it is unclear when this solution will come. ‘It is a very complex process which is going to take extra time’.

Restructuring

That Genesis has problems is clear, only it is unclear how big the problems are. On 10 November, the company stated that it had about $175 million in its FTX account.

However, that was no longer accessible. On 16 November, withdrawals at Genesis were halted and investment bank Moelis in & Company was hired to restructure the company. As early as 7 December 2022, Islim indicated that a solution would take “weeks”. We are now almost a month on.

For its part, Gemini has engaged investment bank Houlihan Lokey to help them recover their $900 million. Bitvavo says in its latest update that it can pay out the 280 million euros to customers one-on-one and not be in money trouble.

Author

  • Ivan came across the topic of cryptocurrencies in early 2016 and, as an author and enthusiast, has been intensively involved with the topics of cryptocurrencies, blockchain and STOs ever since.

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