Gemini Allegedly Borrowed $100M From Winklevoss Twins
According to a report from Monday, April 10th, the Winklevoss twins allegedly recently lent $100 million to Gemini—a cryptocurrency company they themselves founded. Gemini has been facing a series of issues since the collapse of FTX last November. Their Earn program was first forced to freeze withdrawals and later shut down due to the ensuing confusion, and the twins were engaged in a public feud with the DCG’s Barry Silbert for most of January.
Gemini Borrowed $100 Million From its Own Co-Founders
After failing to find an outside source of funding, Gemini reportedly borrowed as much as $100 million from the personal wealth of its co-founders—Tyler and Cameron Winklevoss. Neither the exact time the loan was given, nor its precise purpose is currently known, but it has been indicated that it happened recently.
Gemini has been under significant pressure for many months since the collapse of the FTX Group. Its Earn program was forced to freeze withdrawals already in November as a result of Geneis’ exposure to Sam Bankman-Fried’s failed company. Early in 2023, the program was officially shut down as a part of a broader feud between the Winklevoss twins and the Digital Currency Group.
After nearly two months of uncertainty, Tyler and Cameron Winklevoss accused DCG’s Barry Silbert of negotiating in bad faith with regard to the issues between Gemini and Genesis. Soon after, they published another open letter calling for Silbert’s removal. While the conflict is seemingly over due to an agreement reached late in January, clear results of the deal are yet to be seen.
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The Damage Caused by the Collapse of FTX
Considering that 2022 has been, pretty much since its beginning, a very challenging year for digital assets, the downfall of FTX proved to be the straw that broke the camel’s back for many already-embattled companies and investors. Already in November—the same month SBF’s company collapsed—BlockFi filed for bankruptcy citing the debacle as the primary cause.
The Digital Currency Group’s Genesis is another major digital assets company that has been forced into bankruptcy due to FTX contagion. The collapse of Sam Bankman-Fried’s company also had other, less direct effects. It is likely that the record scrutiny of cryptocurrencies coming from US and international regulators has been triggered by the scale of the fraud uncovered at FTX. Furthermore, the collapse saw some chaos on the media side of digital assets as a well-known cryptocurrency outlet—The Block—was forced to replace its CEO after his ties to SBF became known.
At the same time, FTX’s new management is working on the recovery of the company’s missing funds and recently released another report shedding light on what the internal situation at the company was like under SBF. Additionally, while the full effects of the contagion are likely not yet known, the digital assets industry managed to recover greatly since the start of 2023 with some cryptocurrencies, like Bitcoin, being more than 75% in the green since January 1st.
Why did Gemini borrow $100 million from the Winklevoss twins? Tell us what you think in the comments below.