Gemini Receives $100M Personal Loan from the Winklevoss Twins
- Tyler and Cameron Winklevoss, the twin co-founders of crypto exchange Gemini, have provided a $100 million personal loan to the exchange.
- The firm suffered heavy damages during the bearish run in the crypto market in 2022, in contrast to raising $400M at a valuation of $7.1B in 2021.
- In January, the exchange laid off 10% of its employees, making this its third round of layoffs in eight months.
Popular crypto exchange Gemini has been experiencing cash troubles following the beginning of the 2022 bearish run of the crypto market. After laying off a significant number of employees over the past few months, the crypto trading platform’s co-founders, Tyler and Cameron Winklevoss, are attempting to fund the exchange’s operations from their own pockets. The twins have provided a personal loan of around $100 million to the firm.
According to a report from Bloomberg on April 10, the Winklevoss twins provided a $100 million loan to the Gemini crypto exchange after attempts at securing outside funding. This announcement comes at a time when the leading cryptocurrency in the market, Bitcoin (BTC), has reached its highest price since June 2022, breaking the $30,000 price region.
It is also crucial to note that the $100 million figure stands out in part because that equals the amount Gemini agreed to give some of its customers as part of the Genesis bankruptcy case. Genesis, a part of the Digital Currency Group (DCG), froze withdrawals in 2022 following the collapse of the former multi-billion dollar crypto exchange FTX under the leadership of Sam Bankman-Fried.
Prior to Genesis bankruptcy filing, the withdrawals from the platform were frozen, which resulted in the lockup of the money belonging to the customers of the Gemini Earn Yield product.
The Earn product was a service that allowed depositors to earn interest on their crypto holdings. As a part of the settlement between Genesis and the Winklevoss twins’ crypto exchange, the latter would provide $100 million to the users of the Earn service. It is unclear if the two $100 million amounts are related.
It is crucial to note here that the Winklevoss twins rose to fame in 2004 when they sued Mark Zuckerberg, the founder and CEO of Meta, the parent company of social media platforms Facebook and Instagram, claiming that he stole their idea for Facebook. Since then, the twins have gone on to create Gemini, a major crypto exchange that raised $400 million at a valuation of $7.1 billion in November 2021.
However, following the 2022 crypto market bear run, venture funding for crypto start-ups has collapsed. The collapse of popular crypto companies like FTX and Silvergate Capital has acted as fuel on top of the fire. Nevertheless, the collapse of the US banking system, with major banking institutions like Silicon Valley Bank (SVB) and Signature Bank crumbling, has fueled the recent rise in the price of Bitcoin (BTC).
As reported earlier by Bitnation, Gemini, along with its founders, Tyler and Cameron Winklevoss, were sued by a group of investors who claimed that the Gemini Trust Earn product, which offered an 8% return on holdings, was not registered with authorities. Brendan Picha and Max J. Hastings, the plaintiffs in the case, filed the lawsuit against the crypto exchange in a Manhattan federal court, accusing the firm and the Winklevoss twins of fraud and violation of the Exchange Act.
The crypto exchange was one of the companies to lay off employees in January 2023, despite BTC outperforming the S&P 500 in the first quarter of the year. The exchange laid off 10% of its employees, making this the company’s third layoff in around eight months.
On the other hand, Cameron Winklevoss believes that the United States will be “missing out on the greatest period of growth since the rise of the commercial Internet” due to its anti-crypto propaganda.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
