NewsletterBreaking: Gemini Exchange Owed Nearly $1 Billion By Genesis, DCG
Gemini Genesis News: Crypto exchange Gemini appears to be the latest victim of the contagion from FTX collapse, followed by adverse effects for BlockFi, Genesis and the Digital Currency Group (DCG). Earlier, crypto lender BlockFi officially filed for chapter 11 bankruptcy owing to the market effects caused by the FTX meltdown. While it remains to be seen as to how many more companies would fall victim to the FTX downfall, it is important to safeguard the interest of Gemini customers. According to latest reports, the crypto exchange is owed to the tune of nearly $1 billion by Genesis trading.
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Gemini Customers At Risk
The Winklevoss brothers are reportedly working on recovering the funds. According to a Financial Times report, the users of Gemini exchange are owed $900 million. Troubles began for Genesis Trading after the Sam Bankman-Fried crypto empire collapsed due to a liquidity crisis. Meanwhile, Gemini founders Cameron and Tyler Winklevoss are putting in efforts to negotiate the recovery process.
The report mentioned that the crypto exchange constituted a creditors committee that is responsible for recovery of user funds. Whereas bankrupt lender BlockFi said it plans to recover all dues owed to it by counterparties including FTX. On November 28, the lender began restructuring proceedings as a result of the FTX contagion.
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Genesis Bankruptcy Avoidable?
Amid speculation of potential Genesis bankruptcy, the company’s management hired restructuring lawyers to prevent it from going for bankruptcy proceedings. The crypto brokerage firm had recently ramped up efforts to raise $500 million in emergency funding to save itself from the crisis. However, reports suggested that Genesis hired investment bank Moelis & Company to explore alternative options, which includes the possibility of bankruptcy. After the FTX meltdown in mid-November, Genesis stopped redemptions and initiation of new loans on November 16.
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