Gemini announces termination of agreement with Genesis Global Capital and closure of Earn program

Cryptocurrency exchange Gemini announced the termination of the loan agreement with Genesis Global Capital (GGC) and the closure of the Earn program, accusing its management of deceiving users. Gemini co-founder Cameron Winklevoss tweeted an open letter to the GGC Board of Directors, accusing its subsidiary Genesis of defrauding more than 340,000 Gemini users and Earn program participants by offering 7.4% per annum on client deposits. Winklevoss alleges that Digital Currency Group (DCG) CEO Barry Silbert and other senior executives at the crypto lender have made false claims about the solvency and financial position of Genesis. This was done to convince Gemini and other lenders that DCG covered the $1.2 billion loss incurred by Genesis after it provided a $2.36 billion loan to Three Arrows Capital, a cryptocurrency hedge fund that went bankrupt in June 2022, Winklevoss said in the letter.. Therefore, the billionaire called on the DCG board of directors to remove Zilbert from the position of CEO, since he is unable to effectively manage the venture company. Gemini also stated that it will prioritize the return of client funds and is ready to act as quickly as possible.. The exchange sent a notice to GGC to terminate the loan agreement and terminate the Earn program. Winklevoss stated that Genesis is required to return all crypto assets involved in the program. Silbert responded to Winklevoss' accusations by noting that DCG never pooled funds with any of its subsidiaries and that DCG's relationship with Three Arrows Capital was limited to a loan and trade agreement.. According to Zilbert, Three Arrows Capital has separately invested in a number of Grayscale products. Recall that in November, after the collapse of the FTX exchange, Genesis suspended the withdrawal of funds from the Earn program, and in December, Gemini offered Genesis and DCG a plan to return client funds.