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Gemini’s $282 Million Move: Protecting Users or Tabloid Deception?

Published September 29, 2023 10:25 AM
Teuta Franjkovic
Published September 29, 2023 10:25 AM

Key Takeaways

  • Gemini Trust Co. has strongly criticized recent reporting by the New York Post.
  • The company labeled the report as false and a deliberate attempt to influence public opinion.
  • The report focused on Gemini’s withdrawal of $282 million from Genesis Global in August 2022.
  • Gemini clarified that withdrawn assets didn’t belong to the company but to participants in the Gemini Earn program.
  • Gemini accused Barry Silbert and DCG of diverting attention from their own alleged fraudulent actions.

Crypto exchange Gemini Trust Co. voiced its anger and annoyance with recent reporting  by the New York Post, saying that the information it spread about its Earn Programme was not only false but also an intentional attempt to sway public opinion.

The Complaints

Gemini reportedly withdrew $282 million from the now-bankrupt Genesis Global in August 2022, according to The New York Post, implying that this activity was at best dubious and perhaps damaging to investors.

Additionally, the report cast the business and its founders, Cameron and Tyler Winklevoss, in an unfavourable light and hinted at potential financial mismanagement. Gemini reiterated to CCN their used the X platform to correct the record in response to these accusations. The corporation outlined the type of the disputed funds and fiercely denied any wrongdoing. 

The $282 million taken out of Genesis in August 2022 wasn’t corporate money, founders’ personal money, or the money of their investment company, claims Gemini. Instead, it was made clear that it was money that the Gemini Earn program’s participants owned.

The exchange continued by claiming that Barry Silbert and Digital Currency Group (DCG) had planned an intentional ploy to sway public opinion and divert attention away from their own fraudulent actions, which are currently the subject of a criminal investigation. Gemini asserted that these parties had provided a prefabricated and made-up story to the New York Post.

Liquidity Reserve Decision Shields Earn Users from Genesis Woes

Examining the Gemini Earn programme and its parameters is essential to have a complete understanding of the situation. Gemini made sure to emphasise in the tweet that the programme allowed them to create a “liquidity reserve” for Earn members’ benefit.

Gemini that it made the decision to boost its liquidity reserve in reaction to the market turbulence that occurred in the summer of 2022. On August 9, 2022, it took $282 million from Genesis that belonged to Earn users and held it in the liquidity reserve for the benefit of consumers. 

“In hindsight, this proved to be a wise and prudent decision. As a result of our risk management, Earn users had $282 million less exposure to Genesis when Genesis halted redemptions on November 16, 2022,” the company stated .

Gemini Defends Its Moves

When Genesis stopped accepting redemptions on November 16, 2022, Gemini said that boosting the liquidity reserve was a reasonable and sensible course of action because it protected Earn users from significant exposure to Genesis.

The company that it “quite ironic that a decision that protected Earn users to the tune of hundreds of millions of dollars has been twisted like this. And it’s quite obvious that this “exclusive story” — which is pure fantasy — was pre-packaged and handed to the New York Post by Barry Silbert and DCG in another brazen attempt to manipulate public opinion, Earn users, and distract from their fraudulent behavior that is currently under criminal investigation”. 

Gemini furthermore said that if The Post and its reporter Tom Barrabi had instead contacted the company in good faith asking for a comment just before their self-imposed publishing deadline, they might have been able to figure all of this out and spared themselves a lot of professional disgrace and embarrassment.

“But of course, the Post is a tabloid — not a serious financial publication — and clearly willing to launder the lies of Barry Silbert and DCG in exchange for clicks, even if it means deceiving their readership,” it said.

Divided Reactions Amongst Crypto Community

And while some members of crypto community were fully supportive of Gemini’s actions, praising the company as a valid trader and calling for regulatory clarity, others were pretty suspicious when it comes to Gemini’s explanations.

However, most of their answers were related to their own missing funds that Genesis, never returned.

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