Gemini Trust, the cryptocurrency firm headed by Cameron and Tyler Winklevoss, has stopped withdrawals from their Earn program. It was because its lending partner for the Earn program – Genesis Global Capital, paused withdrawals on its lending platform.
The Gemini Earn program was introduced in February 2021, which allows individuals to earn money by lending their cryptocurrency to institutional borrowers. Genesis is one of the third-party borrowers with whom Gemini has collaborated to provide the service.
According to the platform’s official statement:
We are aware that Genesis Global Capital, LLC (Genesis) — the lending partner of the Earn program — has paused withdrawals and will not be able to meet customer redemptions within the service-level agreement (SLA) of 5 business days.
This past week has been an exceptionally hard time for the crypto industry. The Earn Program’s SLA was not met, but Genesis and Digital Currency Group both remain committed to fulfilling their obligations to customers under this program, said Gemini Trust.
The platform makes sure that it is collaborating with the Genesis team to assist clients in rapidly redeeming their cash from the Earn program. Moreover, in the upcoming days, it will give out further details.
Additionally, it was also stated in the announcement post that this move does not affect any of its other products or services. It was also claimed:
Gemini is a full-reserve exchange and custodian. All customer funds held on the Gemini exchange are held 1:1 and available for withdrawal at any time.
Gemini Lending Partner’s Decision To Halt Withdrawals
Genesis Capital Group, LLC has been struggling due to the collapse of Terra and Three Arrows Capital, which caused the company’s assets, such as loans, to fall drastically. Now, FTX collapse also affects it.
Following an “abnormal” amount of withdrawal requests that surpassed its existing liquidity and blaming market unrest caused by FTX’s bankruptcy, the lending division of cryptocurrency brokerage Genesis today suspended redemptions and new loan originations.
In the tweet’s comment section, the company said:
We have hired the best advisors in the industry to explore all possible options. We’re working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity.
Nevertheless, the company isn’t alone in this either – Blockfi, Liquid Global, and Salt Lending also halted withdrawals because of what happened with FTX.