Earlier today, on December 21, 2022, the cryptocurrency exchange Gemini briefed its customers about the liquidity issues that its rival exchange, Genesis, is going through. Gemini stated that its creditor committee had recommended a strategic plan to both Genesis and DCG as well as devised a way to recover assets.
We Have Provided Genesis and DCG with an Option- Gemini.
Via his Twitter page, the co-founder of Gemini exchange, Cameron Winklevoss, announced that the exchange’s creditor panel has proposed a roadmap to solve the financial distress of the Genesis crypto exchange and its holding company, (DCG).
Genesis Trading and DCG owe a total of $900 million to Gemini since November earlier this month, when the exchange paused withdrawals on its protocol. Genesis Trading and Gemini Exchange had earlier partnered with each other far back in 2021 when the Gemini Earn initiative was rolled out.
The Earn initiative worked in a way that allowed users to earn a profit rate of 7.4% when they deposited their assets in the platform. However, as a result of the fall of the FTX crypto exchange, Genesis Trading had to pause withdrawals to its customers, leaving Gemini’s funds stuck with Genesis.
Since it stopped withdrawals over alleged irregular withdrawal requests, Genesis has consistently tried to placate the fears of its customers that the situation is still under control. However, updates coming up show that the situation of the exchange is still quite bad, especially since a confidential document has surfaced showing that it had already tried to solicit funds from investors even before the fall of FTX.
The holding company, Digital Currency Group (DCG), is not left out, as it clearly appears that it is struggling with finances.
DCG To Make A Response This Week
The creditor panel has stated that it expects both Genesis Trading and DCG to give a first response before the end of this week. The prominent Houlihan Lokey bank, which is representing the interests of Gemini, stated that the proposed plan was drafted after a comprehensive analysis of data obtained from both entities and their advisors.
Gemini has continued to receive a backlash from its customers, who seem appalled that the exchange would associate their funds with an outsider exchange without due diligence.
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