More signs of trouble have emerged at Gemini, the Winklevoss twins’ embattled cryptocurrency exchange, after the sudden collapse of FTX raised fears of contagion across the sector.
On Wednesday, CoinDesk reported that Gemini had $563 million in customer traffic in the past 24 hours, but only $78 million in inflows. Net output was the largest of any cryptocurrency platform.
After a legal battle with former Harvard classmate Mark Zuckerberg over Facebook, founders Cameron and Tyler Winklevoss, who have become cryptocurrency kings over the years, have also reportedly been forced to temporarily suspend withdrawals from their Gemini Earn program, where customers can earn interest. digital currency.
The move raised questions about the health of the program, which holds more than $700 million in customer money, according to Bloomberg. Genesis is said to have consulted consultants to try to find a solution to the situation. According to the report, Earn’s accounts were frozen after major lending partner Genesis Global Capital imposed a similar freeze.
In a lengthy statement, Gemini said it was aware that Genesis had suspended the recall and that it was “unable to meet customer payments within its service level agreement (SLA) within 5 business days.”
“The last week has been an incredibly difficult and stressful time for our industry,” Gemini said. “We are disappointed that the Win program SLA will not be met, but we are encouraged by the commitment of Genesis and its parent company, Digital Currency Group, to do everything in their power to meet their commitments to customers under the Win program.”
Company officials added that the outage “does not affect any Gemini products or services.”
Meanwhile, Gemini’s exchange went offline for a while on Wednesday – which the company attributed to an issue with Amazon Web Services.
“Gemini full online exchange; All client funds held on the Gemini exchange are held on a 1:1 basis and can be withdrawn at any time,” Gemini tweeted.
The Post has reached out to Gemini for further comment on the situation.
Genesis’ lending unit was forced to halt repayments and new lending on Wednesday – a move the firm attributed to volatility caused by the collapse of FTX.
“FTX has created unprecedented market volatility, resulting in abnormal withdrawal requests that have exceeded our available liquidity,” Genesis said on Twitter.
The twins’ move only fueled fears among crypto investors that the collapse of FTX would overwhelm the entire sector and result in massive volatility and losses.
Adding to the pain is the recent crisis at Gemini, which laid off 10% of its staff in June as the Winklevoss twins admitted that cryptocurrencies were in a “contraction phase”.
FTX filed for Chapter 11 bankruptcy last week after the platform was unable to meet its obligations as a result of a sudden liquidity crisis. According to Reuters, at least $1 billion in customer funds are still missing.
Another platform, BlockFi, is preparing for a potential bankruptcy filing and has stopped withdrawing customers, the Wall Street Journal reports. The company admitted it was “significantly exposed” to the investigation by FTX and its sister cryptocurrency trading firm Alameda, which filed for bankruptcy.