Gemini's recent 10-K filing reveals potential governance risks as its founders allegedly engaged in circular lending practices. The filing suggests that the founders borrowed Bitcoin and Ethereum from the exchange through WCF, using these assets as collateral for dollar loans. During its IPO, the company reportedly transferred debt through discounted shares, resulting in the founders controlling 94.7% of voting rights. Despite an unqualified audit from Deloitte, Gemini faces significant borrowing pressures, with its stock price plummeting 88% since listing. The exchange is now grappling with lawsuits and a crisis of trust.
Gemini Faces Governance Risks Amid Alleged Circular Lending
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