Another major crypto firm is taking steps to mitigate damage from the fallout of FTX’s collapse.
- The Winklevoss brothers are the owners of two cryptocurrency brokerages—Gemini and Genesis.
- With the fall of FTX, they are facing a crisis of convincing users that their exchanges are solvent, The Street reports.
- Gemini announced on Wednesday that it is facing its own liquidity crisis and pausing withdrawals and new loans on its accounts for the next five business days.
- The company has assured users that it is consulting advisors to get withdrawals open in the coming days.
Why it’s News
Gemini is just one of several companies being negatively and severely harmed by the fallout of FTX’s collapse. Several other major crypto exchanges are facing liquidity crises as a result of users attempting to buy out of the market at the same time. AAX and other exchanges have paused withdrawals.
“We are working with the Genesis team to help customers redeem their funds from the Earn program as quickly as possible. We will provide more information in the coming days,” says Gemini.
“We have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business. We are working diligently to shore up the necessary liquidity to meet our lending client obligations.”
Backing up a Bit
This was a bad year for crypto, even prior to FTX’s fall—with major firms like Celsius and Voyager Digital facing liquidity issues as a result of Bitcoin’s precipitous collapse in value. Crypto lender BlockFi has paused withdrawals and is expected to file for bankruptcy, Bloomberg reports.
Gemini, AAX, BlockFi, and others have clarified though that they have the ability to pay off users and that the withdrawal pauses have to do with other factors.
“Gemini’s other products and services are not impacted since the company is a full-reserve exchange and custodian, according to a tweet. All customer funds held on the Gemini exchange are held one-to-one and available for withdrawal at any time,” says The Street.