Gemini Starts Customer Reimbursement Plan – What Will Happen To Genesis And The DCG?
The current crypto market bearish trend triggered by the collapse of the FTX ecosystem is pushing the industry into panic mode. Hence, there is an uncertain future hovering over the digital asset space.
Many crypto exchanges have been deeply hit by the FTX contagion, with more believed to be on the brink of bankruptcy and their fund owners unable to withdraw their initial investments.
Gemini Partners Genesis Global Capital to Repay Customers
Gemini announced on its Twitter handle on November 22 that it has begun ensuring that its Earn users get their funds back. Accordingly, the platform collaborates with Genesis Global Capital alongside its parent company, Digital Currency Group (DCG).
Meanwhile, Genesis Capital is the lending partner facilitating Gemini’s Earn program. The exchange disclosed that allowing Earn clients to redeem their funds is its main priority.
More importantly, Genesis Capital and DCG are motivated to realize the commitment. Gemini also praises the Earn users for their patience as the broader crypto market struggles hinder the firm’s ability to meet their needs.
The firm also pledges to continue providing regular and frequent updates to the users as it works towards making it possible for them to get their returns. However, the repayment plan only involves Gemini’s Earn product; other investment tools are not part of the reimbursement.
With the collapse of the FTX exchange and its subsequent bankruptcy, Gemini and a host of other crypto service providers have been badly hit by the crisis. As a result, the firm is taking measures to reduce the impact of FTX exposure on its operations.
Gemini revealed that all customer funds in its custody are safe and available for withdrawal at the right time.
Genesis Seeks More Funding to Boost Liquidity
Meanwhile, the crypto lender Genesis Global Capital wants more funds to add to its reserve to bolster its liquidity status and offer more services to customers. Thus, the company hired the services of the investment bank, Moelis & Co., to help revamp its business after suspending withdrawals.
In a note to clients, the acting CEO of the firm, Derar Islim, revealed that it is deliberating with investors, creditors, and borrowers about the latest development. As Islim disclosed, Moelis’ expertise is needed to help expand and fast-track Genesis’ strategy in the coming days.
For most of the month, Genesis has been struggling to secure more funding as it attempts to partner with more creditors after its exposure to FTX. Over the past week, the firm forced its institutional lending arm to halt redemption and suspend further borrowing.
Furthermore, the crypto lender is reported to have disclosed that it had close to $175 million in locked derivatives with the troubled crypto exchange. As a result, DCG pumped an additional $140 million in equity funds to bolster Genesis’ balance sheet.
DCG revealed on November 22 that the expected date for Genesis to repay its $575 million debt is May 2023.
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