Crypto broker Genesis owes Gemini’s customers $900 million – FT

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(Reuters) – Crypto broker Genesis and its parent company Digital Currency Group (DCG) owe $900 million to clients of the Winklevoss twins’ crypto exchange Gemini, the Financial Times reported on Saturday.

Crypto exchange Gemini is trying to recover the funds after Genesis was caught off guard by the collapse of Sam Bankman-Fried’s FTX crypto group last month, the newspaper said, citing people familiar with the matter.

Venture capital firm Digital Currency Group, owner of Genesis Trading and cryptocurrency wealth manager Grayscale, owes $575 million to Genesis’ crypto lending arm, Digital’s chief executive said last month. Currency, Barry Silbert, to shareholders.

Gemini, which operates a crypto lending product in partnership with Genesis, has now formed a creditors’ committee to recover funds from Genesis and its parent company DCG, the report adds.

Separately, Coindesk reported on Sunday that creditor groups negotiating with Genesis currently account for $1.8 billion in loans, and that number is expected to continue to rise. A second set of Genesis creditors, also with loans worth $900 million, is the law firm Proskauer Rose, CoinDesk said, citing a source.

Genesis and Gemini did not immediately respond to Reuters’ request for comment.

Genesis has hired investment bank Moelis & Company to explore options, including a possible bankruptcy, The New York Times reported last month, citing three people familiar with the matter.

Genesis Global Capital suspended customer repayments at its lending business last month, citing the sudden bankruptcy of cryptocurrency exchange FTX.

Cryptocurrency trading platform FTX filed for bankruptcy protection in the United States on Nov. 2. 11 in the most publicized crypto explosion to date, after traders withdrew billions from the platform in three days and rival exchange Binance dropped a bailout deal.

(Reporting by Shubhendu Deshmukh and Rhea Binoy in Bengaluru; Additional reporting by Akriti Sharma; Editing by Toby Chopra, Christina Fincher and Diane Craft)

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