Gemini Sets the Record Straight on $282M Withdrawal Prior to Genesis Bankruptcy, Refuting Rumors

In a recent message on X, Gemini addressed a story from the New York Post, which suggested that the exchange ‘underhandedly withdrew $282 million before Genesis's financial collapse.’ New York Post story According to a source who chose to remain anonymous, The New York Post alleged that the Winklevoss twins, co-founders of Gemini, had withdrawn their private investments from the troubled crypto lender.

The report pointed to two insiders claiming that Gemini had withdrawn significant amounts from Genesis months ahead of the lender filing for bankruptcy, emphasizing that Digital Currency Group’s Genesis was instrumental in supporting the Earn program.

Today, Bloomberg also reported Clarifying the situation on X, Gemini stated that the $282 million withdrawn from Genesis in August 2022 was actually funds belonging to Earn users. They emphasized that these were not corporate funds from Gemini nor the personal funds of the Winklevoss twins or their investment firm, Winklevoss Capital.

Gemini criticized the New York Post for publishing a blatantly false narrative about the Gemini Earn program, asserting that the claims in the article directly contradicted the facts. The $282 million that was taken from Genesis was, in fact…

We are disappointed that the @nypost The exchange explained that the structure of the Earn Program permitted Gemini to establish a 'liquidity reserve' designed to safeguard Earn users by retaining a segment of the funds they had deposited.

— GeminiTrustCo (@GeminiTrustCo) September 28, 2023

On August 9, 2022, amid a downturn in the market, Gemini made the decision to withdraw $282 million from Genesis and set it aside into the liquidity reserve.

'Looking back, this choice proved to be both astute and prudent,' Gemini remarked. 'Thanks to our risk management strategies, Earn users faced $282 million less exposure to Genesis when the company paused redemptions on November 16, 2022.'

Tensions between Gemini and Genesis escalated following the collapse of FTX last November. As the fallout from FTX spread, Genesis opted to freeze customer withdrawals and eventually sought bankruptcy protection. At the time, Genesis disclosed that its derivatives trading unit had around $175 million trapped in FTX.

The Feud Between Gemini and Genesis 

Legal actions are currently underway against both Gemini and Genesis concerning an alleged unregistered offering related to the Earn program.

in January, the SEC brought charges In February, Genesis, Digital Currency Group (DGC), Gemini, and other creditors reached a preliminary agreement focused on asset recovery amid the bankruptcy crisis, but that agreement subsequently fell apart.

DCG, along with its chief executive Barry Silbert, has been entangled as they seek to recover $1.1 billion from Genesis. Gemini has accused DCG and Silbert of committing 'fraud and deception' as detailed in their legal filings.

In July, Gemini sued In their recent tweet, Gemini labeled the New York Post’s narrative as 'utter fantasy' and alleged that Silbert had orchestrated the article to sway public perception.

'Naturally, the Post is more of a tabloid than a serious financial news outlet and is evidently prepared to propagandize the falsehoods of Barry Silbert and DCG for clicks, even at the cost of misleading their audience,' Gemini commented.

However, some users are frustrated, noting that their funds in the Earn program have been immobilized for over a year. They are questioning why they have yet to receive their money back.

In response to Gemini’s post, users said 'As a user who’s had coins locked for nearly a year, I’m feeling overwhelmed, angry, and losing faith in you. I’m at a point where I just want my coins returned, and you can keep the interest it was generating. Just give me a choice…,' lamented a user.

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