Genesis Global, once described by Fortune Magazine ´as the Goldman Sachs´ of digital finance, has been declared bankrupt today with debts $3.4 billion owed to more than 100,000 creditors. The company is in the process of attempting to raise funds to restructure the business under new ownership. Derivatives, spot trading and custody transactions are not included in the filing and trading is still continuing. As a result, Genesis´ exposure to FTX is raising questions about its parent company, Digital Currency Group, a major player and owner of the industry ´bible´ Coinbase.
THe SEC has also charged Genesis with selling unregistered securities on a product called ´Earn´.
Its exposure to FTX raises questions about its parent company, Digital Currency Group, a major player and owner of the industry ´bible´ Coinbase.
The Winklevoss twins, who once sued Mark Zuckerberg over who came up with the idea for Facebook are claiming $900 million they are allegedly owed by Genesis for 340,000 customers. Their crypto company Gemini, founded in 2014, partnered with Gemini to allow customers to lend out their crypto assets to earn interest.
The price of the most valuable crypto asset Bitcoin has fallen over 40 per cent in the last year. Moody’s recently reported that global funding for blockchain and cryptocurrency startups has decreased by 35 per cent.
Gemini Trust Company
Gemini was founded in 2014 by the Winklevoss twins. The global cryptocurrency exchange operates a complex system to facilitate trading and storage of Bitcoin and subsequently other cryptocurrencies followed. The Securities and Exchange Commission charged Gemini Trust Company with the unregistered offer and sale of securities to retail investors through the Gemini ´earn crypto asset lending program´. In 2016 New York Governor Andrew Cuomo announced the approval of Gemini as the first licensed Ethereum. Facilities were set up that allowed clients to withdraw cash from the exchange. Gemini then began to utilize NASDAQ’s SMARTS technology to monitor trades and combat fraudulent activity and price manipulation on its exchange.