Gemini has formed a creditor committee to try to recoup funds from Genesis, as well as Genesis parent company DCG.
Genesis owes $900 million to customers of Gemini Earn
After a domino effect in which Gemini suspended withdrawals from its "Earn" lending product due to Genesis suspending withdrawals due to FTX's collapse, it's been revealed by the FT that Genesis holds around $900 million in Gemini customer assets.
- "Crypto broker Genesis owes Winklevoss exchange’s customers $900mn", Financial Times
Gemini halts withdrawals from their lending service
The Gemini cryptocurrency platform announced that they would be pausing withdrawals on their lending platform. This is because they partner closely with Genesis' lending products, which halted withdrawals shortly before.
The company said in a blog post that they were "working with the Genesis team" to restore withdrawals. Like Genesis, they tried to urge that the issue would not affect other Gemini products. However, a service outage that same day did little to strengthen trust in the company.
Gemini lays off second round of employees in less than two months
After laying off 10% of its workforce in the first week of June, Gemini has performed a second round of layoffs. The layoffs have not been announced externally, nor were they widely communicated internally, according to employees who spoke to TechCrunch. One employee said that 68 members, or 7% of the employee base, were no longer in the company Slack channel on Monday morning.
The week prior, an internal operating plan document was shared to the anonymous employee platform Blind, which outlined a plan that would reduce company headcount to around 800 — a 15% reduction. The plan was taken down shortly after. Gemini co-founder Cameron Winklevoss wrote in a Slack message that the leak was "super lame", and wrote that "friendly reminder that Karma is the blockchain of the universe — an immutable ledger that keeps track of positive and negative behavior."
Gemini announces layoffs of 10% of their staff, blames "crypto winter"
The Winklevoss twins, founders of the Gemini crypto exchange, announced to employees and in a public blog post on June 2 that they would be laying off 10% of their workforce. They wrote that the crypto industry is "in the contraction phase that is settling into a period of stasis — what our industry refers to as 'crypto winter.'" According to CNBC, Gemini employed around 1,000 people, meaning that around 100 would lose their jobs.
The announcement came on the same day that the CFTC announced a lawsuit against Gemini for allegedly making false or misleading statements.
CFTC sues Gemini over allegedly misleading statements
Gemini is a major cryptocurrency exchange and market for Bitcoin futures. The Commodity Futures Trading Commission (CFTC) filed a lawsuit against Gemini for making false or misleading statements pertaining to their self-certification of a bitcoin futures product. The complaints contains several sections detailing allegations of "false or misleading statements and omissions" concerning loans and advances, self-trading, fee rebates and overrides, and trading volume and liquidity. The lawsuit seeks a permanent injunction preventing Gemini from engaging in trading activities, as well as civil penalties and forfeiture of money earned through their alleged violations of the law.
- "CFTC accuses Winklevoss-owned crypto exchange Gemini of misleading statements in new lawsuit", The Block
- Press release from the CFTC
- CFTC v. Gemini complaint
$36 million taken from retirement accounts of IRA Financial customers investing in crypto
IRA Financial, a platform for managing retirement investments, boasts of being "the first self-directed IRA company to allow their clients to invest in cryptocurrencies, such as Bitcoin, directly via a cryptocurrency exchange". Unfortunately, they were probably also the first to have that feature exploited, when an administrator account was apparently compromised and users' funds were transferred out of their connected Gemini accounts. Two days later, IRA Financial publicly acknowledged "suspicious activity that has affected a limited subset of our customers with accounts on the Gemini cryptocurrency exchange". The stolen funds, taken in a mix of Ethereum and Bitcoin, amounted to around $36 million.