Gemini, the popular crypto exchange, has officially confirmed that it withdrew $282 million of its Earn users’ funds from the bankrupt crypto lender Genesis in August of last year. This statement was released on September 28th in response to a report by the New York Post, which alleged that Gemini’s co-founders, Tyler and Cameron Winklevoss, had secretly withdrawn over $280 million from the bankrupt lender. The report stated that it was unclear whether these funds were Gemini corporate assets or from the Winklevoss twins’ personal crypto stash. However, the New York Post clarified that the withdrawn funds did not include any Gemini customer funds.
Gemini Dismisses Misleading Report
Gemini strongly refuted the claims made in the New York Post report, labeling it as “completely misleading.” According to the exchange, everything alleged in the Post’s story is the exact opposite of the truth. The exchange justified its $282 million withdrawal by pointing to the terms of the Gemini Earn Program, which allowed them to create a liquidity reserve for the benefit of Earn users. Gemini explained that this withdrawal was made during the broad market turmoil in the summer of 2022, with the intention of increasing the liquidity reserve to safeguard the funds of their users.
Gemini further clarified that the $282 million withdrawal was a strategic move to ensure that their users had less exposure to Genesis. The bankrupt lender had halted redemptions in November of last year, causing significant concern in the crypto community. By withdrawing the funds and holding them in the liquidity reserve, Gemini aimed to safeguard their users’ funds during this uncertain period. The exchange emphasized that every decision was made with their users’ best interests in mind.
In response to the New York Post’s report, Gemini suggested that it was a deliberate attempt to boost the reputation of Digital Currency Group (DCG), the parent company of Genesis, and its CEO, Barry Silbert. Gemini claimed that DCG had been aware of the lender’s insolvency since 2022 but chose not to disclose this critical information to investors. The vehement dismissal of the report as “pure fantasy” indicates Gemini’s belief that there may be ulterior motives behind the misleading article.
Gemini’s withdrawal of $282 million from Genesis and its response to the misleading report sheds light on the importance of transparency and trust in the crypto industry. As a prominent player in the market, Gemini’s actions are under scrutiny, and it is crucial for them to maintain the faith of their users and the wider crypto community. With this latest statement, Gemini aims to set the record straight and assure their users that their funds are always their top priority.
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