Cameron Winklevoss and Tyler Winklevoss, billionaires, dipped into their pockets to support their crypto-exchange Gemini Trust Co. which has suffered many setbacks over the past yearlong market downturn.
According to two people familiar, the twins provided a loan of $100 million to Gemini. According to three people, Gemini had been seeking funding from outside investors for months but no agreements were reached. Gemini and the twins Winklevoss did not respond to requests for comment.
According to data from PitchBook, venture funding for crypto startups fell by 80% to $2.4billion in the first quarter. This was due to the collapse of crypto exchange FTX, as well as slowdowns in tech and crypto industries. Gemini has had its own problems during the crypto bear markets, which is a stark contrast to when it raised $400m at $7.1 billion in November 2021.
The implosion at FTX resulted in the bankruptcy of Genesis Global Holdco, a crypto lender. This severely harmed Gemini. Gemini had Genesis Global as its sole partner in the Gemini Earn lending product. Genesis stopped withdrawing funds in November and Gemini was forced to stop redemptions of Earn accounts. This left $900,000,000 of customer money unclaimed, and it sparked an heated feud between Barry Silbert, chief operating officer of Digital Currency Group, which is the parent company to Genesis. The two sides came to an agreement on principle to settle the dispute. Gemini would contribute as much as $100 millions. One person familiar with the matter stated that the Winklevoss loan will not be used to pay for this, but instead will be used to finance operations.
The Securities and Exchange Commission sued Genesis and Gemini, claiming that the Earn product violated securities laws. Gemini is also facing a lawsuit by the Commodity Futures Trading Commission. This suit alleges that Gemini misled a derivatives regulator in order to launch the first US-regulated Bitcoin Futures contract. Gemini lost 10% of their workforce in January. This was on top of a series of layoffs that took place in June. The exchange also lost its chief operating officer Noah Perlman to Binance, the chief compliance officer.
According to CryptoCompare, Gemini’s spot trading volume market share dropped to 0.133% from 0.20% one year ago. In the last 24 hours, Gemini had $13 million in spot trade volume. Coinbase, the largest crypto exchange in America, made $660 million during the same time period, according to CoinMarketCap.