Genesis Withdrawal Pause Is Affecting Gemini Lending Program

On November 16th, 2022 Tyler and Cameron Winklevoss’ cryptocurrency platform Gemini Trust Co. claimed that customer redemptions for its Earn program are being delayed after its partner, Genesis Global, halted withdrawals on its borrowing platform due to a liquidity shortage.

According to a statement from Gemini Earn’s website page, a product that produces yields for its clients, Genesis is one of the main borrowers. According to the New York-based company the delay does not currently affect any other Gemini products or services and is working with Genesis to enable users to redeem funds as “quickly as possible.”

The statement said:

The past week has been an incredibly challenging and stressful time for our industry. We are disappointed that the Earn program SLA will not be met, but we are encouraged by Genesis’ and its parent company Digital Currency Group’s commitment to doing everything in their power to fulfill their obligations to customers under the Earn program.

Genesis suspended withdrawals for lending after the shocking collapse of the cryptocurrency exchange FTX. The company declared that it has hired consultants to investigate all available options, including additional capital, and that it will present a strategy for its loan business next week. Genesis’ exposure to the insolvent cryptocurrency hedge fund Three Arrows Capital had already had an impact on its lending operations. At Genesis, trading and other services are still available for now.

The Winklevoss twins, who first gained notoriety by disputing Mark Zuckerberg’s claim to have invented the social network Facebook, were among the first to invest in and support Bitcoin. Last November, Gemini completed a $400 million funding round valuing the business at $7.1 billion.