Winklevoss Twins Pour $100 Million into Gemini, Says Bloomberg

Gemini co-founders, Tyler and Cameron Winklevoss, have extended a personal loan worth $100 million to their cryptocurrency exchange as external fundraising attempts fail. The move comes amidst regulatory scrutiny of Gemini’s activities.

The Securities and Exchange Commission (S.E.C.) charged Gemini and Genesis Global Capital with offering unregistered securities through the exchange’s Earn program in January.

Meanwhile, New York’s Department of Financial Services reportedly began investigating the exchange after many users claimed assets in their Earn accounts were FDIC-protected.

Despite Tyler Winklevoss’ accusations that the S.E.C. had issued a “manufactured parking ticket,” the exchange was forced to lay off 10% of its workforce in January and lost its chief operating officer, Noah Perlman, to Binance.

The collapse of FTX in November 2022 dealt a significant blow to Gemini, leading to the bankruptcy of crypto lender Genesis Global Holdco, the exchange’s sole partner on its Gemini Earn lending product.

When Genesis suspended withdrawals in November, Gemini was forced to pause redemptions on Earn accounts, resulting in stranded $900 million in customer funds.

The feud between the Winklevoss twins and Barry Silbert, CEO of Digital Currency Group, Genesis’ parent company, ensued but was settled in February with a preliminary agreement for Gemini to contribute up to $100 million.

Unfortunately, FTX’s collapse had a ripple effect across the crypto industry, leading to a slowdown of venture funding for crypto startups. In the first quarter of 2023, venture funding for crypto startups plummeted by 80% to $2.4 billion compared to the same period last year.