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Gemini Terminates Its Crypto Yield Product, Amping Up Battle With Genesis

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The Winklevoss twins' crypto exchange Gemini escalated its dispute with Digital Currency Group's (DCG) Genesis Global Trading – its partner on a crypto lending product pitched to smaller investors – by terminating a key aspect of their relationship.

Gemini ended the master loan agreement (MLA) between its customers and Genesis, Gemini told customers of its Gemini Earn in an email on Tuesday. "This officially terminates the Earn Program and requires Genesis to return all assets outstanding in the program," according to Gemini's email. "Existing redemption requests are not impacted and continue to await fulfillment by Genesis."

Crypto broker Genesis' lending arm halted customer withdrawals in November in the aftermath of FTX's collapse. That locked up Gemini Earn customers' money. Gemini Earn was launched in February 2021 and marketed as an interest-earning account for cryptocurrency deposits, with Genesis supplying the yield Gemini Earn investors received.

Gemini's termination is effective as of Jan. 8, the deadline the company previously set in a Jan. 2 public letter to Barry Silbert, the CEO of Digital Currency Group (DCG), the parent company of Genesis (and CoinDesk). The letter also accused Silbert of "engaging in bad faith stall tactics" during negotiations.

A spokesperson for Genesis didn't immediately respond to a request for comment.

The decision to terminate the partnership comes amid other signs the feud between Gemini co-founder Cameron Winklevoss and Digital Currency Group (DCG) CEO Barry Silbert is heating up.

On Tuesday, Winklevoss penned another public letter calling for the ouster of Silbert and accused DCG and Genesis of committing accounting fraud. The fraud allegation reappeared in a claim Gemini filed in court that same day in response to a class action lawsuit put forward by Gemini Earn customers.

"Gemini is also a victim of the Genesis/DCG Group's conduct," the court filing read. "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."

In the court filing, Gemini also deflected blame from angry customers saying the complaint "goes after the wrong parties" and that users acknowledged in writing that their assets in the Earn product "faced the risk of total loss."

Additionally, Gemini denied all claims made in the lawsuit because customers had signed an agreement to "arbitrate all claims relating to the Gemini Earn program" and that plaintiffs' claims and causes of action "should not be litigated in any forum unless Genesis is joined."

Original link: https://www.coindesk.com/business/2023/01/10/gemini-terminates-its-crypto-yield-product-amping-up-battle-with-genesis/

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