Winklevoss brothers inject $100 million into Gemini exchange as a personal loan

Winklevoss brothers, Tyler and Cameron, who co-founded the United States-based crypto exchange Gemini, have reportedly funded the business with their funds amid the prevailing market downturn in the crypto industry. Tyler Winklevoss is the firm’s CEO, while Cameron Winklevoss serves as the company’s president.

Based on the report, the Winklevoss twins made a personal $100 million loan to the exchange after it failed to secure funding from external investors. The search for funding and subsequent loan came after the exchange became the subject of an investigation by the Securities and Exchange Commission (SEC).

Noteworthy, the SEC filed charges against Gemini Exchange and Genesis Global Capital for offering unregistered securities through the platform’s Earn program.

Gemini impacted by various events

Gemini exchange has suffered multiple events over the past year, starting with pausing withdrawals for its Earn product, which was offered in collaboration with Genesis after cryptocurrency exchange FTX imploded. The service was later discontinued permanently, and the process of returning funds to users is still ongoing.

Moreover, this is not the first time the Winklevoss brothers have had to seek alternative measures to save the exchange. In February, they had to outsource $100 million from the exchange to contribute towards helping Gemini Earn users recover their lost funds. While Cameron Winklevoss announced the funding decision, it remains unclear whether the amount was allocated from personal or corporate funds.

Another negative incident that befell Gemini Exchange was retrenching a significant portion of its workforce. They started with 10%, 15%, and then another 10% over an eight-month period ending January 2023.

Besides the SEC, the New York Department of Financial Services (NYDFS) also started a probe into the Gemini Exchange after reports by platform users claiming their Earn accounts had been subjected to Federal Deposit Insurance Cooperation (FDIC) protection.

Upon the announcement of the charges, Tyler Winklevoss made an accusation against the SEC for issuing a “manufactured parking ticket.” In the charges, Tyler claimed that Gemini staff was negotiating with the regulator for over a year before the enforcement action took effect.

The complaint underscored that of the largest US-based crypto exchange, Coinbase, whose chief CFO revealed that personnel had convened with the SEC officials “more than 30 times” within a nine-month span but still received a Wells Notice.