Genesis and DCG seek a way to restore assets amid liquidity woes
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Gemini co-founder Cameron Winklevoss shared in an update on Twitter that global investment bank Houlihan Lokey had drawn up a plan on behalf of the creditors’ committee to resolve the liquidity issues at Genesis and its parent company Digital Currency Group (DCG). According to Winklevoss, resolving the liquidity problems would provide Gemini clients with a way to recover assets Genesis and DCG owe them after the FTX collapse.
Earn Update: Today, Houlihan Lokey, on behalf of the Creditors’ Committee, unveiled a plan to resolve the liquidity issues at Genesis and DCG and outline a path for asset recovery.
— Cameron Winklevoss (@cameron) December 20, 2022
According to the brief “earn update” shared by the Gemini co-founder, the plan presented by Houlihan Lokey on behalf of the creditors’ committee “is based on information we have received to date from Genesis, DCG and their respective advisors.” Winklevoss added, “The creditors’ committee expects an initial response this week.”
In 2021, Winklevoss crypto exchange Gemini launched the Earn offering, an interest rate program for clients in the United States through a partnership with Genesis. It offered investors the opportunity to earn 8% interest by lending their cryptocurrencies, including bitcoin (BTC) and stablecoins, which are tied to fiat currencies.
The crypto exchange paused the program on Nov. 16 after being suspended on the FTX collapse. On the same day, its partner Genesis temporarily suspended payouts, citing “unprecedented market turbulence” days after around $175 million worth of funds were disclosed in an FTX trading account.
Related: Tether says it has no exposure to Genesis Global or Gemini Earn
On Dec. 3, Cointelegraph reported that crypto lender Genesis and its parent company Digital Currency Group allegedly owed Gemini clients $900 million. The report was based on information from the Financial Times, which quoted people familiar with the matter.
Gemini has laid off about 20% of its employees this year, and its problems appear to have been compounded by FTX’s collapse.
