Cameron and Tyler Winklevoss: Gemini co-founders among 100K creditors affected by Genesis' bankruptcy
SAN FRANCISCO, CALIFORNIA: Well-known Crypto brokerage Genesis has filed for bankruptcy, according to sources inside the industry. Following the catastrophic collapse of Sam Bankman Fried's FTX, where the lender stored some of its cash, the filing took its route through the US bankruptcy court on Thursday, and is the newest crypto victim. A contract with the nearly 100,000 creditors who are owed money as a result of FTX's demise is being negotiated by the firm, according to earlier reports this week. The company had been reportedly in the middle of the now-completed Chapter 11 paperwork.
The business, which is owned by venture capital firm Digital Currency Group, is said to have been debating filing for bankruptcy for some time since it owes creditors an amount that is estimated to be in excess of $3 billion. Gemini, founded by Cameron and Tyler Winklevoss, is one of the companies that is owed money. Gemini claims that when crypto crook Bankman-Fried filed for Chapter 11 bankruptcy in November, more than $900 million of its customers' money vanished from the exchange.
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Who are Cameron and Tyler Winklevoss?
Identical twins Cameron and Tyler Winklevoss co-founded the cryptocurrency exchange Gemini in 2014; it now conducts over $200 million in deals each day. Cameron is the president of Gemini, and Tyler is the CEO. The ex-Olympic rowers are famed for blaming Mark Zuckerberg for stealing their social networking concept, as per Forbes.
Why is Genesis filing for bankruptcy?
As per the sources, the brothers were among several who suffered losses when the FTX dropped. Cameron and his brother's exchange used Genesis as its primary lending partner, resulting in a loss for the brothers and millions of their consumers. In its statement on Thursday, Genesis' lending unit stated that the company, which has claimed it cannot afford to repay the billions due to creditors, has assets and liabilities ranging from $1 billion to $10 billion.
Who else is affected by Genisis declaring bankruptcy?
Lenders such as Genesis, founded by crypto billionaire Barry Silbert, sustained significant losses on loans provided to FTX's now-defunct trading firm Alameda Research and its hedge fund sponsor Three Arrows Capital, both of which declared bankruptcy. According to a recent Bloomberg article, as personalities such as Winklevosses seek to collect monies provided to Genesis, the New York-based lender has already quit because it cannot raise the funds to repay its debtors.
It comes amid fears that more companies will fail in the aftermath of FTX's massive crash late last year. According to Bloomberg, Genesis' Digital Currency Group's bitcoin lending unit has been in private negotiations with creditor parties, including Gemini, despite its liquidity crisis. But as per the Daily Mail report, those talks appear to have failed, according to insiders who spoke to Bloomberg and other outlets, after Cameron Winklevoss called for the Digital Currency Group board to fire its CEO, accusing him of failing to provide adequate justification for not providing refunds during the creditor talks. The Silbert-led company had already issued a warning that if it couldn't raise the money needed to pay off its creditors, it could have to declare bankruptcy.