"Legally" Ponzi scheme? The Gemini Exchange and its founders are revolving
AuthorZeniumProtos Staff
CompileZeniumWu said the chain
TL; DR: Gemini 10-K Report and Core Keys for Internal Revolving Lending
I don't knowLeft hand to rightOTHER ORGANISERGeminiLoaning encrypted assets, Gemini mortgages them to third parties for dollar loans to form internal revolving loans。
I don't knowControl over low-cost harvestingDURING THE IPO PERIOD, THE FOUNDER ' S DEBT WAS CONVERTED TO A SUPER-VOTING STOCK AT A DISCOUNT OF 20%. THE BULK HAS A HIGH PRICE, WHILE THE FOUNDERS HAVE FIRM CONTROL OVER THE VOTING RIGHTS 94.7%。
I don't knowThe sword of the ceilingDESPITE THE UNQUALIFIED AUDIT REPORT ISSUED BY DELOITTE, THE WCF IS READY TO WITHDRAW UP TO 4,619 BTC LOANS AND EXCHANGE LIQUIDITY IS BEING TESTED。
I don't knowMarket value avalanche: The market has so far suffered a serious setback of 88 per cent (to US$ 4.42) and has been downgraded to “sale” by top investment banks and faced class action。
I don't knowCore conclusionsGemini's operating model favouring founders' interests and relying on related party funds has collapsed in secondary markets and is facing a serious crisis of governance and trust。
Cameron andTyler WinklevossThrough its private investment company Winklevoss Capital Fund (WCF), thousands of bitcoins ($BTCs) and ephemerals ($ETH) were borrowed from their home encryption exchange Gemini. Then Gemini mortgaged the encrypted asset. HereGalaxy DigitalAND NYDIG TO RAISE DOLLAR LOANS。
In September 2025, the exchange was listed at $28 per share and converted $695.6 million of the WCF debt to a class B equity with super-voting rights at a discount of 20 per cent, thus giving the twin brothers direct access to Gemini 94.7。
The Gemini 10-K document submitted yesterday details this complete operating structure. Social media users call it a “cycle operation”。
X PLATFORM MESSAGES:
It's all a circular Ponzi scheme:
Loans from related parties WCF to BTC; mortgages to lending institutions to obtain loans in United States dollars (involving Galaxy, bond issues, NYDIG)。
SOME OF THE LOANS WERE SETTLED AT IPO IN THE FORM OF DISCOUNTED SHARES。
More than that, there are more operations (regarding Ripple and RLUSD, convertible bonds, etc.)
Deloitte issued an unqualified audit report: there were no key audit matters (KAM) and no mention was made of related parties, liquidity, business continuity, etc
How legitimate are these operations
Winklevos Capital Fund loan cycle
Here is the basic link between the flow of funds. Winklevoss Brothers WCF lends to Gemini BTC and ETH through an open term agreement。
Subsequently, Gemini offered these borrowed encrypted assets as collateral to third-party lending institutions. Galaxy Digital provided $116.5 million in loans at an interest rate of 11-12 per cent and a mortgage rate of 145-155 per cent. NYDIG provided $75 million through repurchase agreements at an interest rate of 8.5 per cent。
Gemini spends the US dollar on day-to-day operations and on regulatory capital requirements。
On 15 September 2025, when IPO was completed, the exchange had cashed out of the $456 million IPO net proceeds and repaid $116.5 million owed to Galaxy。
Gemini is currently trading in NASDAQ, stock code GEMI。
The exchange paid offRippleThe amount of $238.5 million under warehouse receipt credit (warehouse credit liability) remained outstanding at the end of the year。
However, the debts of the twins themselves were not repaid in cash。
Gemini converted $200 million in WCF convertible instruments, $475 million in WCF fixed-term loans and accrued interest at $22.40 per share, into 31.1 million shares in category B equity with super-voting rights。
THIS CARRY-OVER IS 20 PER CENT LOWER THAN THE PRICE PAID BY THE BULK INVESTOR FOR THE SAME EQUITY A STOCK ON THE SAME DATE。
THE DIFFERENCE BETWEEN CATEGORY A AND CATEGORY B EQUITIES IS ONLY BETWEEN VOTING RIGHTS AND DISTRIBUTION OF OWNERSHIP. IN ADDITION TO THIS, THE TWO HAVE A NOMINAL VALUE, A DIVIDENDS SHARE, ANDPriority in liquidationExactly。
CATEGORY B EQUITIES CAN BE CONVERTED TO CATEGORY A EQUITIES AT A RATIO OF ONE TO ONE。
The bulk purchase price is $28, while the Winklevos brothers only need $22.40
This discount is at the core of the operation to the detriment of ordinary shareholders。
WCF loans encrypted assets to Gemini. ThenGemini encumbers the borrowed assets to leverage additional loans。Specifically, Galaxy and NYDIG borrowed United States dollar funds from Gemini for their daily operations。
Gemini then distributed shares to the WCF at a discount during the same IPO, and this IPO put a 20 per cent higher entry cost on the part of the scattered。
Extended reading: According to the source, Winklevoss brother withdrew $280 million before Genesis collapsed
The SEC 10-K document confirms that as at 31 December 2025 Gemini still owed WCF 4,619 BTCs, a portion with a value of approximately $400 million。
In 2025, Gemini paid $24.2 million in borrowing costs to the WCF。
Based on the above, Gemini, according to NASDAQ's corporate governance standards, is also a triple debtor, trustee and “controlled company”。
Despite being a publicly traded business, Gemini's co-founder still holds the vast majority of voting rights。
In addition, according to Arkham Intelligence, quoted by the encryption researcher Emmett Gallić, WCF has some 8,757 BTCs in Gemini Custody hosting addresses。
Deloitte issues an unqualified audit opinion
Deloitte issued an unqualified audit report for Gemini. The reality, however, is that the WCF is entitled at any time to repay the 4,619 BTC loans。
The mere written notification of the twins is sufficient to undermine the very foundation of the exchange, which they actually control。
Gemini's current share price in the secondary market has dropped by 88 per cent over its IPO issue price. “Gemini Space Station” is its legal subject name, with the connotation of rocket lift-off, but it is clearly not well-known at this time and its opening price on the first day of IPO is 37.01 USD per share。
Only $4.42 per share remains。
Gemini set the IPO issue price at $28 on September 11, 2025. The following day, when it opened in 37.01 United States dollars, it hit a high point of 45.89 United States dollars, and then began a downward trend. The Unit received $4.42 on 31 March 2026, after an initial reduction of $3.91 this Monday, after 52 weeks of a new low, which was 88 per cent lower than the open market price。
The company ' s market value has risen from $3.8 billion to about $520 billion. Citigroup, Cantor, Truist and Evercore have downgraded the Unit to a “sale” rating。
There are now class actions alleging that the company misled investors in strategic planning。
