Dylan LeClair, a senior analyst at UTXO Management and founder of 21stparadigm has spread the word that 25,000 Bitcoins have been removed from the Gemini exchange belonging to the Winklevoss twins. This constitutes nearly half a billion USD – a staggering $418,775,000.
That was 13% of all the Bitcoin stored on Gemini.
The massive outflow of funds took place after Gemini Earn platform halted withdrawals following the same move by its lending partner, Genesis Global Capital. The latter is affiliated with the Digital Currency Group founded by crypto billionaire Barry Silbert.
25k BTC have been withdrawn from Gemini over the last 24 hours, 13% of total BTC on the platform. pic.twitter.com/D3pldz8XWm— Dylan LeClair 🟠 (@DylanLeClair_) November 17, 2022
Digital Currency Group comments on Genesis situation
Digital Currency Group (DCG) commented on the situation with Genesis. Its official Twitter handle stated that the decision to halt withdrawals was made due to the "the extreme market dislocation and loss of industry confidence caused by the FTX Implosion."
They also tweeted that any aftermath is limited only to Genesis lending itself and will not impact the trading or custody services offered by this company. Besides, DCG assures readers that this situation is of a temporary nature and will not by any means affect DCG itself or any of its subsidiaries.
The impact lies with the lending business at Genesis and does not affect Genesis’s trading or custody businesses. Importantly, this temporary action has no impact on the business operations of DCG and our other wholly owned subsidiaries.— Digital Currency Group (@DCGco) November 16, 2022
"Investors are spooked"
LeClair mentioned that investors were alerted after Gemini Earn paused withdrawals and then Gemini exchange followed suit. Gemini keeps telling everyone that its Earn program does not use the custodial service of the platform.
The analyst does not believe that Gemini is going to become insolvent. However, he says, people have become spooked after the FTX collapse and are losing trust in exchanges at the moment, regardless of their reputation and status. This reaction is justified, he stated.