As per Gemini’s president and co-founder, Cameron Winklevoss, “Houlihan Lokey submitted a strategy on behest of the Creditor Committee to fix the liquidity concerns at Genesis and DCG and pave the way for the repossession of assets.”
According to reports, Genesis and its holding firm DCG owe $900 million to customers of Gemini Earn. Houlihan Lokey is a New York-based investment business that specializes in creditor advising and has aided Lehman Brothers and WorldCom in comparable procedures. Starting November 16, customers of the cryptocurrency exchange’s Earn service, which allowed them to collect between 0.45% and 8% interest on their cryptocurrency, were unable to retrieve their cash.
This was the result of a third-party infection affecting Genesis, the primary supplier providing the Earn service. Genesis ceased withdrawals immediately, blaming the aftermath of FTX’s crash and “excessive withdrawal demands” The present financial position at DCG has also resulted in severe repercussions for other members of the business.
Dutch cryptocurrency exchange Bitvavo claims it is “trapped” with €280 million ($297 million) owed to Digital Currency Group (DCG). These assets represent 17.5% of the overall €1.6 billion ($1.69 billion) in deposits as well as other assets that the cryptocurrency exchange claims to handle. Nevertheless, DCG has publicly stated that the assets in question are owned by its “autonomous affiliate,” Genesis, and not DCG.
Grayscale Capital, a subsidiary of the DCG conglomerate, is likewise under financial strain, albeit for other reasons. The Grayscale Bitcoin Trust, a prominent fund that provides access to Bitcoin without requiring investors to retain or control the asset, has reached record price cuts to the underlying asset.