The Winklevoss brothers reportedly loaned Gemini 13 billion yen at their own expense


Loan to cryptocurrency exchange Gemini

The Winklevoss brothers, who run the cryptocurrency exchange Gemini, are said to have loaned Gemini about 13.3 billion yen ($100 million) from their personal assets. Bloomberg reported, citing sources familiar with the matter.

Three people familiar with the matter said Gemini had been unofficially trying to seek funding from outside investors in recent months, but negotiations failed to reach a deal. The Winklevoss brothers have not issued an official statement on the matter.

Problems with Gemini

Gemini have been facing a lot of problems lately.

In January, the U.S. Securities and Exchange Commission (SEC) sued Gemini, along with crypto lender Genesis, for violating securities laws. Gemini’s yield service “Gemini Earn” is demanding payment of fines, etc. for offering and selling unregistered securities.

The Gemini side insists they have always tried to follow the laws and regulations. He said he regretted that the SEC did not act to protect investors and filed the lawsuit without prior notice.

connectionSEC sues Gemini and Genesis for securities law violations

Genesis then filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Due to the liquidity crisis caused by the FTX bankruptcy of Genesis’ subsidiary, Gemini’s yield service, which was jointly provided with Genesis, was also forced to freeze.

The Gemini Trust Company, which operates Gemini, is also a senior Genesis creditor, with a claim of approximately ¥100 billion ($766 million) against Genesis.

connection: Virtual currency lending company Genesis filed for bankruptcy, creditors such as Gemini and Van Eck

Chapter 11 of the U.S. Bankruptcy Code (Chapter 11)

A reconstruction-type bankruptcy legal system similar to the Civil Rehabilitation Law of Japan. The company will be restructured by reducing debts while continuing to operate. Debt collection will be suspended after the application, and the debtor will work on debt consolidation and formulate a reconstruction plan within 120 days in principle.

▶Cryptocurrency Glossary

Gemini has already committed $100 million to recover lost funds for users of its yield service, Gemini Earn. It is unclear whether the amount was allocated from the Winklevoss twins’ personal assets or from corporate funds.

On the 7th, Gemini reported on the progress of its debt collection from Genesis.

Genesis’ Unsecured Creditors Committee (UCC) continues its work to maximize creditor asset recovery. Gemini will continue to support and work with the Creditors Committee and UCC.

This work will be completed in the next few weeks. We will let you know as soon as we have more information to share.

A creditors meeting is scheduled for April 13, where creditors are expected to have an opportunity to ask Genesis questions.

Staff reduction

Gemini is also cutting staff. 10% reduction in staff in June 2022 and 15% reduction in July 2022. A further 10% reduction was announced in January 2023.

Cameron Winklevoss said in January that he had no other choice but to be fired due to “persistent negative macroeconomic conditions” and “unprecedented fraud” in the crypto industry. “Fraud” seems to refer to the fact that after FTX went bankrupt, it was discovered that it was misappropriating customer funds.

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