Cryptocurrency broker Genesis and its parent company Digital Currency Group (DCG) owe clients of the Winklevoss twins’ crypto exchange Gemini $900 million, the Financial Times reported.
Cryptocurrency exchange Gemini is trying to recoup the funds after Genesis screwed up over the failure of Sam Bankman-Fried’s FTX cryptocurrency group last month, the newspaper said, citing people familiar with the matter.
Venture capital firm Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis’s crypto lending arm, Digital Currency’s chief executive told shareholders last month, Barry Silbert.
Gemini, which runs a crypto-lending product in partnership with Genesis, has now formed a committee of creditors to recover the funds from Genesis and its parent DCG, the report added.
Separately, Coindesk reported Sunday that the creditor groups in negotiation with Genesis currently account for $1.8 billion in loans, and that number is likely to continue to grow.
A second group of Genesis creditors, with loans also amounting to $900 million, is being represented by the Proskauer Rose law firm, CoinDesk said, citing a source.
Genesis and Gemini did not immediately respond to Reuters’ request for comment.
Genesis has hired investment bank Moelis & Company to explore options, including possible bankruptcy, the New York Times reported last month, citing three people familiar with the matter.
Genesis Global Capital suspended client swaps at its lending business last month, citing the sudden failure of cryptocurrency exchange FTX.
Crypto trading platform FTX filed for bankruptcy in the United States on Nov. 11 in the highest-profile crypto explosion to date, after traders withdrew billions from the platform in three days and rival exchange Binance dropped out. a bailout deal.