Crypto exchange Gemini Trust Co. withdrew hundreds of millions of dollars from Genesis Global Holdco LLC several months before the lender froze deposits and ultimately filed for bankruptcy, Bloomberg News reported. Genesis and Gemini offered customers in the so-called Earn program the opportunity to generate yields on their crypto tokens. The service let customers of the Tyler and Cameron Winklevoss-owned exchange lend their tokens through Genesis. In August 2022, Gemini took out about $282 million in cryptocurrency from Genesis. The funds withdrawn from Genesis were used to build out a reserve intended to ensure Gemini Earn customers could make immediate redemptions. None of the money went directly to Gemini’s billionaire founders, the Winklevoss twins. Days after the collapse of FTX sent the already beleaguered crypto market into a spiral, Genesis froze customer withdrawals. In January, it filed for chapter 11 protection in New York. Gemini has since filed a claim in the bankruptcy court seeking $1.1 billion on behalf of Earn users. In the months since the initial withdrawal freeze, Gemini, Genesis and its parent company Digital Currency Group have been locked in settlement negotiations that have included public sparring between DCG’s founder Barry Silbert and the Winklevoss twins.
