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The anonymous sources revealed that the loan came after Gemini failed to raise external financial support.
The Winklevoss twins Tyler and Cameron have offered a helping hand to their crypto exchange Gemini by lending the company $100m as the market downturn persists. The heightened uncertainties in the crypto industry are no longer news, as many have lost their investments. Apart from investors, a lot of traders and crypto companies have also recorded massive losses amid the market downturn. The unexpected fall of some cryptocurrencies also triggered more fears among members of the crypto community, which resulted in further declines.
Like many other crypto exchanges, Gemini has suffered setbacks as the digital asset market plunges. The company has to let go of 10% of its workforce in January, representing the third round of layoffs in eight months. At the time, the founders cited “turbulent market conditions” as the reason for employees’ dismissal. The first round of job cuts was in June 2022, when Gemini laid off about 1,100 employees. Shortly after, the company reduced its headcount further by another 7%.
Tyler and Cameron Winklevoss Borrows Gemini $100M
However, the company’s owners have decided to intervene by dipping into their own pockets. According to people familiar with the matter, the Winklevoss twins lent $100m to Gemini. The anonymous sources revealed that the loan came after the company failed to raise external financial support. The exchange tried to seek financial investment from external individuals over the past months. However, all efforts were in vain.
Crypto startups have had difficulty seeking funds since FTX’s dramatic collapse. Investors are keeping their money away from the plummeting crypto industry, which has seen consistent major losses in the past year. Data from research firm PitchBook shows that venture funding for crypto startups fell 80% YoY to $2.4 billion in Q1 2023.
The FTX demise resulted in the bankruptcy of Genesis Global, which also bruised Gemini as Genesis and Gemini have been partners. Genesis Global was the sole partner for Gemini on its Earn lending product, which affected Gemini Earn accounts. When Genesis had to freeze withdrawals in November 2022, Gemini was also forced to halt redemptions on Earn accounts. This caused customers’ funds worth $900 million to be stuck and resulted in a heated argument between the Winklevoss brothers and Barry Silbert, who is the CEO of Genesis parent’s company Digital Currency Group.
The whole matter worsened when the US Securities and Exchange Commission sued Gemini and Genesis. The watchdog alleged that the Earn product violated securities laws. The Commodity Futures Trading Commission (CFTC) also alleged that the exchange described the derivatives regulator to launch the first US-regulated Bitcoin futures contract.