The CEO of crypto broker Genesis has asked for time to sort out its troubled lending unit as its parent company Digital Currency Group (DCG) faces increasing pressure.
Genesis halted withdrawals in November following the crash of crypto exchange FTX. And the platform owes high-yield savings product Gemini Earn $900 million.
On Monday, Gemini co-founder Cameron Winklevoss wrote an open letter to DCG CEO Barry Silbert, accusing him of “bad faith stall tactics.” He claims his company has tried to work out a solution to getting the cash back but to no avail.
Genesis interim CEO Derar Islim said in a Wednesday update to clients that the company is intent on sorting the problem out.
“We remain focused on finding a solution for our borrowing and lending intermediation business and reaching the best outcome for all affected clients,” he said.
“While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time,” he continued, adding that the Genesis team believes it “can arrive at a solution.”
DCG, which is the parent company of a number of crypto products, including mining company Foundry and news publication Coindesk, is under pressure from the crypto moguls the Winklevoss twins. This is because Genesis served as Gemini’s primary lending partner.
Cameron Winklevoss claims that DCG owes Genesis a total of $1.675 billion—but Silbert denies this figure is correct.
The two companies are the latest examples of crypto firms that have been further wounded by FTX’s collapse, after already suffering through a brutal bear market.
The Biggest Story in Crypto in 2022: Contagion—From Terra to FTX
There’s hardly a project, protocol, or institution that hasn’t felt the sting of contagion in 2022. The lucky ones are ending the year having had to downsize their workforce to weather what seems to be an increasingly severe crypto bull market. The unlucky ones—and there have been many—are facing liquidation, lawsuits, and jail time. The contagion—or tendency for a financial crisis to spread to other institutions, markets, or regions—has been unforgiving and widespread. Crypto market capitaliza...
FTX, founded by Sam Bankman-Fried, went bust in November in a highly publicized collapse. Bankman-Fried has since been arrested and charged with eight financial crimes, including wire fraud and conspiracy to commit money laundering. Prosecutors allege that the company used client money to make risky investment bets through its sister trading firm Alameda Research, leading to a misappropriation of customer funds and an $8 billion hole.
FTX’s bankruptcy caused a number of crypto companies and most digital coins and tokens to take a severe beating, and the contagion has continued to spread since.
