A cryptocurrency exchange owned by the Winklevoss twins is trying to recover $900 million from a cash-strapped crypto broker who was devastated in the wake of the FTX crash, according to a… Report.
New York-based Gemini — which was started by Tyler and Cameron Winklevoss after settling a famous beef with former Harvard classmate Mark Zuckerberg over who founded Facebook — partnered clients in an “earn” program in which Gemini gave their coins to crypto broker Genesis in exchange for Steady stream of revenue.
But Genesis said it could not afford all of its proceeds last month after experiencing “unprecedented market turmoil” as a result of FTX’s crash, according to the company. financial times.
The Winklevosses set up a committee of creditors to try to recover their $900 million investment from Genesis and its parent company, Digital Currency Group (DCG).
The twins founded Winklevoss Gemini in 2014, and became the first licensed Ethereum exchange in the US.
Meanwhile, Genesis is trying to raise emergency funds to pay down its debt, and has hired investment bank Moelis & Co to help figure out how to do it, the Financial Times reports.
According to its website, Genesis has about $2.8 billion in active loans. Parent company DCG is $2 billion in debt, $1.7 billion of which is owed to its subsidiary, Genesis.
DCG was founded in 2015 and is one of the largest investors in the crypto industry, worth $10 billion last year.
Genesis, run by billionaire Barry Silbert, lost $1.1 billion over the summer on a loan to hedge fund Three Arrows Capital. DCG assumed the obligations of Genesis and thus owed $1.1 billion to Genesis, according to the Financial Times.
FTX, founded by Sam Bankman-Fried, filed for bankruptcy protection on November 11 in the biggest crypto blowout yet, after traders pulled billions from the platform in three days and rival exchange Binance abandoned a bailout deal.