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Gemini Earn Update : What is Earn on Gemini? Frozen Assets?

Gemini Earn Update : What is Earn on Gemini? Frozen Assets?

Cryptocurrency & Blockchain

Gemini is a digital asset exchange and custodian founded in 2014 by Tyler and Cameron Winklevoss, who are also known for co-founding social networking website Facebook. Gemini is based in New York and is regulated by the New York State Department of Financial Services (NYDFS). Gemini offers a platform for buying, selling, and storing digital assets such as Bitcoin, Ethereum, and other cryptocurrencies.

Moreover, the platform is designed to be user-friendly and is suitable for both novice and experienced traders. In addition to its exchange and custodian services, Gemini also offers a cryptocurrency wallet, which allows users to store their digital assets on the platform. The wallet is known for its high level of security, with features such as two-factor authentication.

Gemini is known for its focus on compliance and regulatory standards, which has helped to establish it as a trusted and reliable platform in the cryptocurrency industry.

However the recent FTX contagion has pulled Gemini and their lending partner Genesis down with it. Apparently Gemini Earn, which offered high yields to Gemini customers to lend out their crypto, relied heavily on trading partners. And hundreds of millions of customer funds remain locked in Genesis.

Of course 7.5% yields were quite high in an interest rate 0 environment attracting many interested customers. However now these funds find themselves locked up.

We asked UNSW Business School Professor Dr. Mark Humphrey-Jenner to shine some light on the situation:

“I think it will depend a bit on whether there is a solution to the genesis problem. Gemini has around $900m locked with Genesis (reported). Genesis has stopped withdrawals. Genesis has had liquidity issues, partly due to the FTX collapse. But, that ‘only’ accounts for $175m. This suggests broader problems and/or a run on the bank. They are trying to raise capital.

However, it’s not clear why anyone would lend to Genesis on anything better than junk bond terms. Gemini might pull through. I’m not sure their promised 8% on deposits was even realistic given that they were on-lending to risky players, and they (seemingly) valued borrowers’ collateral way too high given the risk. So, things look shaky. It seems that prudent crypto practice going forward is to spread counter-parties as much as possible in order to reduce contagion risk.”

Check out Mark’s awesome YouTube show:

https://youtube.com/@financemark

Now Gemini faces a lawsuit from its customers. Investors Brendan Picha and Max J. Hastings filed a class-action lawsuit on behalf of themselves and “others similarly situated” with the U.S. Southern District Court of New York against Gemini.

Cryptocurrency & Blockchain

Gemini Earn Update : What is Earn on Gemini? Frozen Assets?