The master loan agreement (MLA) between Gemini’s customers and Genesis now ceases to exist.
Crypto exchange Gemini has taken its disagreement with Digital Currency Group’s Genesis Global a step further. This follows after it recently announced a decision to terminate a major aspect of an existing partnership between the duo.
The announcement, which was circulated to customers via email, signals the end of a nearly two-year-old Earn Program. Part of the email read:
“This officially terminates the Earn Program and requires Genesis to return all assets outstanding in the program.”
Before things turned sour, Gemini was partnering with Genesis to offer a crypto-lending product to smaller investors. However, per the email sent, the master loan agreement (MLA) between Gemini’s customers and Genesis now ceases to exist.
Gemini further added that the new development will not in any way affect pending redemption requests. The exchange says it will continue to hope that Genesis holds up to those requests and fulfill them.
The Issue
All was well between the partners until November 2022 when Genesis’ lending arm halted customer withdrawals. This was shortly after the FTX collapse that took the industry by surprise. The decision to halt withdrawals, however, directly affected Gemini’s customers whose funds were locked up in the Earn program. As earlier reported by Coinspeaker, Genesis owes roughly $900 million to Gemini.
Subsequently, the exchange began feeling the heat from its angry customers but has since maintained that DCG and Genesis committed accounting fraud.
According to a recent court filing, Gemini insists that it is as well a victim of the Genesis/DCG Group’s conduct, as any of its customers. Part of the filing reads:
“Members of the Genesis/DCG Group misled Defendants about Genesis, its financial condition, and its ability to act as a responsible borrower in the Gemini Earn program.”
Genesis Fires Back at Gemini
Meanwhile, a Genesis spokesperson has said that it appears Gemini is onto a smear campaign against the firm. The spokesperson also expressed disappointment in Gemini’s antics so far, especially considering that private dialogues between the two parties have been somewhat yielding. Nonetheless, he said:
“This is a very complex process that will take some additional time, but we are committed to moving as quickly as possible.”
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