Digital asset brokerage Gemini is struggling to raise fresh capital for its lending service.
The exchange recently took to Twitter to update its users on recent developments, adding that the company is working with Genesis and Digital Currency Group (DCG) to help users redeem their funds from Gemini Earn.
Gemini had earlier halted withdrawals for its Earn program, citing its partner Genesis's inability to dispense funds to Earn customers due to the recent FTX-Alameda collapse.
Crypto exchange Gemini requires fresh funding to remain afloat
The ongoing crypto market turmoil incited by the recent FTX collapse has affected more than 10 crypto companies.
Cryptocurrency exchange Gemini has unfortunately been caught in the crossfire and has had to pause withdrawals for Gemini Earn.
On November 22, Gemini tweeted that they're aware that Genesis, the lending arm of Gemini, battling a liquidity crunch and is actively working on a solution to resolve customer woes.
Furthermore, Gemini clarified a few points about its earn program, stating that it is still working with Genesis Global and DCG to help earn users redeem their funds.
The exchange later tweeted:
This remains our highest priority, and we understand Genesis and DCG remain committed to exploring every possible option to fulfil their obligations to Earn users.
However, the fear of crypto contagion sparked by the collapse of FTX has gripped the market as of late, with users keen on withdrawing their existing funds from Gemini to avoid further damage.
As per Coindesk, the exchange has documented an outflow of more than $485 million as users continue to withdraw their funds amid fears of more market turmoil, which may eventually jeopardise Gemini's position as a leading crypto exchange.
Genesis have no plans to file for bankruptcy
Despite battling a serious liquidity crunch, Genesis issued a new statement on November 21, adding that they do not have any plans to file for bankruptcy imminently.
The firm later added:
Our goal is to resolve the current situation amicably, without the need for bankruptcy. Genesis continues to have constructive conversations with creditors.
Gemini is desperately looking for new funding and has reportedly approached crypto exchange Binance for additional monetary support.
Recent reports indicate that Binance has refused to invest in the embattled crypto lender, leaving Genesis to resume its search for new creditors.
Get the latest on FTX, Binance, Bitcoin and Terra Luna.