Gemini terminates Genesis loans, officially ends Earn Program

Gemini told clients in an email today that it is terminating customer loan agreements with Genesis Global Capital as it winds down its Earn program.

Gemini said it will prioritize the return of customer funds and “operate with the utmost urgency.” 

“We are writing to let you know that Gemini — acting as agent on your behalf — has terminated the Master Loan Agreement (MLA) between you and Genesis Global Capital, LLC (Genesis), effective as of January 8, 2023,” notes the email. It goes on to declare the termination of the Earn program and that Genesis must “return all assets outstanding in the program.”

Existing redemption requests and the capacity of Gemini to seek a resolution to recover its customers assets, are not impacted by the loan agreement’s resolution, the company said in its email. 

Gemini said to expect updates on Tuesday and Friday of each week, at a minimum, “until a resolution has been reached,” the company said.

The collapses of FTX as well as hedge fund Three Arrows Capital caused Genesis to temporarily pause withdrawals, which forced Gemini to lock down funds in its Earn program.

In an open letter posted to Twitter on Tuesday Gemini President Cameron Winklevoss blasted Genesis parent company Digital Currency Group (DCG), accusing Gemini’s former lending partner of defrauding over 340,000 Earn users and misleading them regarding DCG’s solvency. Winklevoss also called for the ouster of DCG CEO Barry Silbert. 

Silbert responded to the accusations from Winklevoss, and said funds were never commingled among DCG subsidiaries, and that its relationship with Three Arrows Capital was limited to a lending and trading agreement.

Three Arrows Capital had separately invested in a number of Grayscale products, Silbert said.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: https://www.theblock.co/post/200649/gemini-terminates-genesis-loans-officially-ends-earn-program?utm_source=rss&utm_medium=rss