Genesis CEO tells clients the crypto brokerage needs more time to get its finances in order as Gemini's Tyler Winklevoss says the exchange is owed nearly $1 billion
The interim CEO of Genesis said that the firm is "committed to moving as quickly as possible" but will need more time to sort out its finances.
The interim Chief Executive Officer of Genesis Trading told clients that its embattled borrowing and lending business will need additional time to resolve its rocky financial situation."While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time," CEO Derar Islim said in a statement on Wednesday. "We believe we can arrive at a solution."The crypto-lending unit, called Genesis Global Capital, halted withdrawals after FTX filed for bankruptcy in November, citing "unprecedented market turmoil." Genesis Global Capital reported $2.8 billion in total active loans as of the third quarter of 2022. The company said FTX's collapse led to an influx of withdrawal requests that surpassed the firm's liquidity, and that its derivatives business had $175 million in locked funds on their FTX trading accounts. In early December, Genesis told clients that some sort of resolution to the issue would take a matter of "weeks."The withdrawal freeze impacted more than just Genesis' clients, however.
Around $900 million of crypto exchange Gemini's customer funds are locked up as well due to a partnership between the two firms on an interest-bearing product.Gemini cofounder Cameron Winklevoss blasted Barry Silbert — the founder of Genesis' parent company DCG — in a public letter on Monday. He accused the crypto baron of "bad faith" business practices, alleging that Silbert owes the crypto exchange and its customers around $1 billion. In response, Silbert took to Twitter to refute Winklevoss's claims."For the past six weeks, we have done everything we can to engage with you in a good faith and collaborative manner in order for you to pay back the $900 million that you owe," Winklevoss's letter reads.
"However, it is now becoming clear that you have been engaging in bad faith stall tactics." Islim, meanwhile, said that Genesis' derivatives and spot trading services still remain fully operational."As a key element in this process, we have made significant progress in refining our business plans for Genesis' client offerings," Islim said, adding the the firm is reducing costs as much as they can.He added: "We believe our continued focus on further sharpening our business will move us in the right direction as we begin the new year, as well as providing more options for working out the lending business."Representatives for Genesis declined to comment.