One of the largest Bitcoin exchanges in the market suspended its operations for the second time in the last seven days. The exchange has been in the dark for its relationship with Genesis since the FTX crisis.
Giant Bitcoin exchange has been experiencing 2 outages in the last 7 days
cryptocoin.com As you follow, Gemini announced four days ago that the stock market will be closed for a while. Shortly after trading opened, it suffered a second outage on December 20. According to the status page, some systems are currently experiencing outages. The exchange added that it is “investigating reports of potential service disruptions.” “All client accounts and funds are completely safe,” he assured.
We are entering maintenance mode while we investigate an application recovery issue. Our team is working diligently to address this issue and we expect all systems to be back online shortly.
— Gemini (@Gemini) December 20, 2022
The exchange was previously closed for hours on December 16 for more than three hours of scheduled maintenance. On this date, one of the primary databases Amazon Web Services experienced an outage due to an EBS outage. At this time, it was unclear why the stock market was experiencing the outage. Meanwhile, rival crypto exchanges OKX and Gate.io recently experienced withdrawal issues due to cloud service provider issues.
Gemini forms creditors committee to resolve Genesis liquidity issues
A report from the Financial Times about two weeks ago suggested that Genesis Global Capital owed $900 million to Gemini clients. Sources noted that the exchange is trying to get the funds back by forming a creditors committee. 31 days after Gemini paused the Earn program’s withdrawals, Cameron Winklevoss tweeted that she had formed a committee with Houlihan Lokey, who served as financial advisor.
On December 17, Gemini co-founder Cameron Winklevoss tweeted an update on the company’s Earn program. Winklevoss, “Update on the Earn Programme. Houlihan Lokey, Financial Advisor to the Committee of Creditors, began advocating for a plan to resolve liquidity issues at Genesis and DCG and provide a means of recovering funds.”
Earn Update: Houlihan Lokey, the Financial Advisor of the Creditor Committee, has begun advocating for a plan to resolve the liquidity issues at Genesis and DCG and provide a path for the recovery of funds.https://t.co/PoRA7WsY4S
— Cameron Winklevoss (@cameron) December 17, 2022
In a nutshell, Gemini is unable to accommodate Earn Program withdrawals because its partner Genesis has paused withdrawals. However, the exchange has delayed the resumption of services multiple times since then. Services were down for about 7.5 hours. Gemini has also reportedly gone through two rounds of layoffs since the start of the crypto winter, along with other firms like Coinbase (COIN) and Bybit.
In addition to Gemini’s problems with Genesis, the company also suffered from a database breach. Sources detailed that 5.7 million Gemini user information was leaked. Some reports pointed out that the files were posted on hacker forums.
