Winklevoss Twins Inject $100 Million Worth of Funds Into Gemini
Gemini has, so far, managed to stay on top of crypto winter, albeit at a steep cost. The crypto exchange conducted two rounds of layoffs within the past year in a bid to cut down on operational costs.
Cash Flow Problems
The crypto exchange’s cash flow was also severely affected by its spat with Genesis, which locked up about $900 million in customer funds.
Gemini’s partnership with Genesis on its Earn product has also brought them under fire from the SEC, who sued both platforms for alleged violations of securities law. To make matters worse, Gemini also lost its COO, Noah Perlman, who has since gone on to become Binance’s Chief Compliance Officer.
Although that disagreement has allegedly been worked out, the customer funds are still, for the moment, in limbo. As part of the deal with Genesis, the Winklevoss twins will provide up to $100 million in investments. However, the current cash injection is reportedly unrelated to the Genesis bailout fund.
Instead, the funds coming from the Winklevoss Twins’ personal fortune will be used for operational funds, according to an unnamed source.
VC Funding Has Dried Up
The decision to pony up without further ado was taken after the pair of crypto moguls carried out an informal fundraising attempt, which found no takers, according to three Bloomberg sources who have spoken out under the condition of anonymity.
The inability to secure funding for a company that raised $400 million only two years ago indicates the uncertainty spreading among VC investors regarding blockchain-centric companies.
The amount invested in these companies over the past quarter is about $2.4 billion. By no means an insignificant sum, it pales in comparison to the amount invested one year prior – 80% less, to be exact.
With outside funding becoming more and more scarce and the stopgap measure already put in place by Gemini failing to stem the bleeding, the Winklevoss twins have resorted to shoring up Gemini’s cash reserves out of pocket. With any luck, the twin’s decision to put their money where their mouth is could embolden other VC investors to help prop up Gemini until the current economic situation takes a turn for the better.
For now, neither the twins nor Gemini has responded to requests for comment.
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OhNoRipple via https://www.ohnocrypto.com/ @Jordan Lyanchev, @Khareem Sudlow
