FTX fallout: Gemini Earn freezes withdrawals – who is affected and when can funds be redeemed
The cryptocurrency platform Gemini halted withdrawals for its crypto lending Earn program as the fallout from the collapse of crypto giant FTX continued today.
Gemini’s announcement came moments after news spread that Genesis Global Capital – its lending partner for the Earn project – had temporarily suspended redemptions and new loan originations. Genesis, in turn, cited the recent market turmoil caused by the collapse of FTX as a reason for the freeze.
Gemini Earn is a lending program that lets users lend cryptocurrencies to certain institutional borrowers and earn interest.
The freeze does not affect other Gemini products and withdrawals from the Gemini exchange are available “at any time”, said Gemini in a blog post.
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‘FTX has created unprecedented market turmoil’
Gemini’s warning of withdrawals delays immediately followed a similar announcement from Genesis Global Capital’s lending unit.
“We are aware that Genesis Global Capital, LLC (Genesis) – the lending partner of the Earn program – has paused withdrawals and will not be able to meet customer redemptions within the service-level agreement (SLA) of five business days,” said Gemini.
Genesis quoted FTX as a reason for its decision to suspend redemptions and lending obligations. “FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity,” Derar Islim, interim CEO at Genesis, told clients on a Wednesday morning call according to media reports.
A follow-up statement on Genesis’ Twitter account echoed the sentiment: “This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion.”
FTX, Genesis, Gemini domino effect
Gemini did not cite FTX specifically, but it did allude to the FTX-sparked market turmoil: “The past week has been an incredibly challenging and stressful time for our industry,” it said. Gemini added:
“We will continue to work with them on behalf of all Earn customers. This is our highest priority. We greatly appreciate your patience.”
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