Platform Updates
Please note that through the Eaglebrook platform, clients have no exposure to Gemini Earn. As expected, Gemini continues to process any withdrawals received and, as part of our normal operations at Eaglebrook, we maintain an ongoing dialogue with all our key service providers including Gemini. As a reminder, Gemini is an onshore regulated digital asset custodian that is a fiduciary and a custodian qualified under the NY Banking Law and licensed by the New York Department of Financial Services. The operations, licensing and regulatory oversight of Gemini is different and in sharp contrast to the requirements and operations (as we currently understand them) of FTX.

Update — 11/28/22

Gemini recently announced the Gemini Trust Center which can be found here. The Trust Center includes a lot of helpful information including total crypto on the Gemini platform, security control audits completed, regulatory registrations in place and the governance structure operating at the company. The Trust Center reiterates that Gemini is a full reserve exchange and custodian, is a fiduciary and qualified as a custodian under the NY Banking Law and licensed by the New York State Department of Financial Services (NYDFS) and maintains capital requirements in excess of customer deposits with this metric monitored by the NYDFS

Update — 11/22/22

Clients of Eaglebrook currently utilize Gemini Trust Company to custody their digital assets. Gemini Trust Company is a custodian qualified under New York Banking Law and is licensed by the New York State Department of Financial Services (NYDFS) to custody digital assets. We have been in communication with Gemini Trust Company specifically regarding the types of failures reported with FTX, and the nature of those discussions is best reflected on Gemini’s Blog found here. Note that Gemini Trust Company is an onshore New York regulated trust company which contrasts with the jurisdiction, entity structure, and regulatory requirements of the FTX parent company. Note that Gemini has continued to reiterate that all customer funds are held 1:1 and available for withdrawal at any time. And that Gemini, pursuant to NYDFS requirements, is required to hold capital in excess of customer deposits. Over the recent period, and as noted in certain articles, Gemini has experienced net withdrawal requests (along with other exchanges) and continues to fulfil them as expected.

Withdrawal requests over the recent period appear to be exacerbated by an announcement regarding the Gemini Earn program, and in particular, actions taken by the lending partner to the Gemini Earn program, Genesis Global Capital, LLC (Genesis). Eaglebrook has been in communication with Gemini on this matter and the best information on this can be found here. We have been told that Genesis paused withdrawals which then required Gemini Earn to pause withdrawals. To our knowledge, Gemini did not initiate the pause. The Eaglebrook investment platform does not allow clients to borrow or lend, nor do we allow customers to participate in the Earn program with respect to assets traded on the Eaglebrook Platform. As such, we are confident that there has been no direct impact of the Earn program to Eaglebrook’s clients.

Eaglebrook’s client accounts are custodied in client’s name with Gemini Trust Company and benefit from their institutional cold storage, hot wallet and security infrastructure. Gemini maintains both a SOC 1 and SOC 2 from a recognized accounting firm, undergoes internal audits and is subject to regulatory oversight requirements (including capital requirements) from the NYDFS.

We understand the markets and headlines are jarring right now and appreciate you taking the time to understand what is (or isn’t) taking place and if you have any further questions or concerns, we would welcome the opportunity to discuss with you.