Gemini, a cryptocurrency exchange based in the U.S., said that it has paused withdrawals on its Earn program.
Genesis Global, the lending partner of the Earn program, is no longer able to meet customer redemptions as mandated in its service-level agreement (SLA).
The exchange said it was working with the Genesis team to help its customers redeem their funds “as quickly as possible” but provided no timeline as to when that might happen. More information will be provided in the coming days.
2/6 We are working with the Genesis team to help customers redeem their funds from the Earn program as quickly as possible. We will provide more information in the coming days.
— Gemini (@Gemini) November 16, 2022
Genesis halted its own withdrawals and redemptions earlier today, saying “abnormal withdrawal requests” have exceeded the company’s current liquidity. The borrower blamed the market turmoil caused by the FTX fallout, saying it further exacerbated the liquidity crisis that began when Three Arrows Capital defaulted.
Launched in February 2021, Gemini Earn is a program that enables users to lend their crypto to institutional borrowers and earn interest. Gemini partnered with third-party borrowers, including Genesis, to facilitate the service. At the time, the company said all third-party borrowers were vetted through a risk management framework that reviews the partners’ collateralized management process.
“The past week has been an incredibly challenging and stressful time for our industry. We are disappointed that the Earn program SLA will not be met, but we are encouraged by Genesis’ and its parent company Digital Currency Group’s commitment to doing everything in their power to fulfill their obligations to customers under the Earn program,” Genesis said in an announcement.
The exchange noted that none of its other products and services were impacted by Genesis. Gemini said that it remained a full reserve exchange and custodian, adding that all customer funds are held 1:1 and are available for withdrawal at any time.
Article updated 14:50 GMT to add details.