Genesis seems unlikely to meet Gemini’s January 8 deadline to solve its liquidity issues and return more than $900 million owed to Gemini Earn lending program users.
According to Bloomberg, Genesis interim CEO Derar Islim told investors in a letter on Wednesday that the lender believes it can “arrive at a solution” but needs “additional time” to sort its finances.
“While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time,” Islim said.
Islim’s letter to Genesis’ investors comes three days after Gemini co-founder Cameron Winklevoss published an open letter to Barry Silbert, the founder and CEO of Digital Currency Group (DCG), which also owns Genesis.
In the letter, Winklevoss accused Silbert of engaging in “bad faith stall tactics” in relation to the more than $900 million Genesis owes to Gemini. Genesis halted loan redemptions on November 17, and Gemini followed a few hours later by suspending Gemini Earn withdrawals.
Winklevoss also said in the letter that DCG and Genesis are “beyond commingled” and that DCG has borrowed $1.675 billion from Genesis, something Silbert later denied.
Winklevoss then asked Silbert to “publicly commit to working together to solve this problem by January 8, 2023”. Silbert has yet to publicly commit to doing anything related to the missing $900 million.
Genesis’ liquidity issues stem from the exposure to and relationship with the disgraced crypto baron Sam Bankman-Fried and his former companies FTX and Alameda Research, which went bankrupt in November.
Genesis admitted shortly after the spectacular fall of FTX that it had around $175 million stuck on the exchange. Later some reports indicated that the firm sought $1 billion in financing from Binance and Apollo but failed to get it.
Genesis was also negatively impacted by the blow-up of the crypto hedge fund Three Arrows Capital (3AC) back in July of last year. The lender reportedly loaned the now-defunct hedge fund $2.36 billion in total. Genesis later filed a $1.2 billion claim against 3AC, which was assumed by the parent company DCG, leaving Genesis with no outstanding liabilities related to 3AC.
Compiled by Metacrunch. Metacrunch is a news complier and aggregator platform which aims to spread awareness and updates on Metaverse, Web 3.0 Technology, Blockchain, Cryptocurrency, NFTs, Airdrops and many more.
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