9/1/2023 0 Comments Gemini earn gusd riskThat being said, yes, this is all true as it pertains to Gemini. I think you might be confusing GEMINI with GENESIS. I would recommend listening to the entire segment, as it is very enlightening. If a loss happens, we would eat that loss on our balance sheet and not socialize it to the lenders." At the 35:30 mark Matt states, "Genesis will always bear the risk. It is an interview with Matt Ballensweig, the Director of Institutional Lending at Genesis Trading. The link I provided above: How Safe is my Crypto Yield? Genesis merely caters to institutional investors and accredited individuals with assets equal to or greater than $10MM. You understand that we cannot be and are not responsible for any Digital Assets once they leave our custody." > The Borrower is not required to custody or maintain the Loaned Digital Assets with us or any other Gemini-controlled account. > We are not a principal to any Loan, and we have no obligation or ability to return the Loaned Digital Assets from your Borrower in the event of a Borrower default. Borrowers are not required to post collateral to you or to us. As a Lender, you understand that you have exposure to Borrower credit risk. > "Loans made through our Program may not be secured. What are you basing that on? I could see them choosing to do it for a small amount if they deem it better for business, but they're certainly not guaranteeing that. > But yes, if a loan were ever defaulted on, Genesis, who has several billion in liquid assets, will eat the default on their balance sheet. The terms specifically state that loans may not be secured, borrowers are not required to post collateral, and Gemini has no obligation to cover a default. It would only be collateral if Gemini held on to the assets. they must have at minimum $10M in liquid assets. The loans that Genesis manages require collateral from the client, i.e. So yes, there is always risk, but with Gemini Earn, there is a lot of mitigation in place. They are also regulated by the SEC and FINRA because they are a prime broker. “Genesis Products and Services are available to select qualified institutional investors and accredited individuals (a) who have assets equal to or greater than $10m (including digital currency holdings, as applicable) and (b) who are interested in (i) trading amounts equivalent to at least USD $250,000 (whether in cash or digital assets) per transaction, or (ii) lending or borrowing at least 100 BTC, 1,000 ETH or USD $2,000,000, whether in cash or stablecoins.” If you go to their website and click to become a client, this is the “fine print”: In short, Genesis will eat any default on their balance sheet, but given they only deal with big clients (think institutional investors), the likelihood of a default is relatively small. Great place to start is here: How Safe is my Crypto Yield? I shared this on a couple of other threads in here, but I think it will lend you some perspective in terms of which direction you wish to go:
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