By George Ward
Gemini has formed a creditors committee to help its members whose funds are tied up in Genesis and DCG. According to reports, the funds are worth over $900 million.
Cameron Winklevoss, the co-founder of Gemini, revealed on Twitter that the exchange’s creditors committee would work to recoup users’ funds. Also, the exchange hired lawyers to help with the whole process.
“We will do all in our power to get users’ money back as soon as possible, which is why we are working very fast,” Cameron tweeted on his account.
The creditor committee, under the counsel of Kirkland & Ellis, has begun talking with Genesis, and its mother firm, DCG. Cameron noted that the committee is working with Barry Silbert, DCG’s CEO, to solve the issue.
Meanwhile, this news is coming after reports stated that Gemini’s users’ funds worth over $900 million were frozen in Genesis. Genesis had stopped withdrawals on its platform in November, citing a liquidity crisis.
The crypto broker paused withdrawals on its platform on November 16th due to its exposure to the now-bankrupt FTX exchange. Meanwhile, Genesis has an active loan worth around $2.8 billion.
Genesis was the major partner behind Gemini’s cryptocurrency lending product, EARN. Unfortunately, Genesis’s liquidity problem affected the EARN initiative, which froze customer deposits.
However, it is uncertain if Genesis and DCG can work together to refund the loan it owes Gemini. There is currently a complex credit relationship between both entities.
DCG owes its subsidiary firm over $1.7 billion in two different loans.
Gemini Expands To Italy And Greece
At the beginning of 2022, Genesis lost loans worth over $1.1B to the bankrupt hedge fund, 3AC. Subsequently, DCG took over Genesis’s liabilities as the parent firm of the crypto broker.
Also, Silbert unveiled that DCG loaned about $600 million to the cryptocurrency lender. The fund was used for share buybacks from shareholders who are not employees and to fund some unknown investments.
Meanwhile, Gemini exchange has been expanding to new regions despite halting withdrawals. Recently, the crypto firm obtained regulatory approval in Greece and Italy.
Last week, the company announced that it had registered as a digital currency operator with OAM (Organismo Agenti E Mediatori). OAM is Italy’s regulator for payment services.
Additionally, Gemini received an operating license from the Hellenic Capital Markets Commission (HCMC) in Greece. The license would allow Gemini to act as a virtual currency exchange and custodial wallet provider.