Crypto collapse: US banks leave crypto, how Genesis kept Gemini hanging on, FTX, Binance, Nexo
“Normalize thinking of con artistry as a predatory crime that largely targets the vulnerable rather than a glamorous caper.” — James Palmer
According to Genesis’ Chapter 11 bankruptcy filings, Genesis owes Gemini Earn customers $785 million. Cameron Winklevoss of Gemini said $900 million, but we guess $785 million was the value of the crypto on the day of the petition.
Genesis was technically insolvent in July 2022 when Three Arrows Capital (3AC) imploded and blew a massive hole in their books. The Winklevoss twins should have shut down Gemini Earn right then and ended their partnership with Genesis — but they chose not to.
By July, the crypto collapse was in full swing. Maybe the Winklevosses crossed their fingers and thought everything was probably survivable when Genesis’ parent company Digital Currency Group (DCG) issued a $1.1 billion IOU to Genesis to fill the gaping void left by 3AC.
GBTC is a bitcoin-backed fund run by Grayscale. Like Genesis, Grayscale is owned by DCG. GBTC used to trade above the price of the bitcoins backing the fund. Since early 2021, GBTC has been trading well below par.
