Gemini’s 10-K reveals loan loop between exchange and founders

Cameron and Tyler Winklevoss lent their own crypto exchange, Gemini, thousands of bitcoin ($BTC) and ether ($ETH) through Winklevoss Capital Fund (WCF), their private investment company. Gemini then pledged that crypto as collateral with Galaxy Digital and NYDIG to raise dollar loans.

When the exchange went public in September 2025 at $28 per share, it converted $695.6 million of WCF debt into super-voting Class B stock at a 20% discount, giving the twins 94.7% of Gemini’s voting power.

Gemini’s 10-K, filed yesterday, spelled out the entire structure. Social media users have called it a circular scheme.

The Winklevoss Capital Fund lending carousel

Here’s the basic tale of how the money flowed. The Winklevii’s WCF lent $BTC and $ETH to Gemini through open-term agreements, i.e. with no fixed maturity.

Gemini then posted that borrowed crypto as collateral with third-party lenders. Galaxy Digital extended $116.5 million in loans at 11-12% interest rates, collateralized at 145-155%. NYDIG provided $75 million through a repurchase agreement at 8.5%.

Gemini used the dollars for operations and regulatory capital requirements.

When the IPO closed on September 15, 2025, the exchange repaid Galaxy’s $116.5 million from $456 million in net proceeds from the IPO.

Gemini now trades on the Nasdaq under symbol GEMI.

The exchange also repaid $238.5 million under a warehouse credit facility with Ripple, though $154 million remained outstanding to Ripple at year end.

The twins’ own debt didn’t get cash repayment, however.

Gemini converted $200 million in WCF convertible notes and $475 million in WCF term loans, plus accrued interest, into 31.1 million supervoting Class B shares at $22.40 apiece.

That conversion price was 20% below what retail investors paid for otherwise equivalent Class A shares on the same day.

Class A and B stock differ only in their voting power and ownership distribution. Otherwise, they have the same par value, rights to dividends, and liquidation preference.

Class B shares are convertible into Class A on a one‑for‑one basis.

Retail paid $28 with the Winklevii at $22.40

The discount is where the circularity inflicted pain on regular shareholders.

WCF lent Gemini crypto. Gemini then pledged the crypto that it had borrowed to get even more loans. Specifically, Galaxy and NYDIG lent Gemini dollars which it used to operate.

Gemini then handed WCF equity at a discount funded by the same IPO that brought retail in 20% higher.

The SEC Form 10-K confirms that Gemini still owed WCF 4,619 $BTC as of December 31, 2025. That balance was worth roughly $400 million.

Gemini paid WCF $24.2 million in loan fees in 2025.

In summary, Gemini is simultaneously debtor, custodian, and a “controlled company” according to Nasdaq corporate governance standards.

Despite being publicly traded, Gemini’s co-founders still control a majority of its voting power.

Moreover, WCF holds roughly 8,757 $BTC in Gemini Custody addresses, according to Arkham Intelligence data cited by crypto researcher Emmett Gallic.

Deloitte signed off clean

Deloitte has issued clean audit reports on Gemini. This is despite the reality that WCF could demand repayment of its 4,619 $BTC loan at any time.

The twins could destabilize the exchange they control with a single written notice.

Gemini’s public stock now trades 88% below its IPO price. “Gemini Space Station,” its legal and rocket-based name that it certainly has not lived up to, opened at $37.01 per share on its IPO day.

It’s worth $4.42 today.

Gemini priced its IPO at $28 on September 11, 2025. It opened at $37.01 the next day and hit $45.89 before beginning a relentless decline. The stock closed at $4.42 on March 31, 2026, down 88% from the opening price, after touching a 52-week low of $3.91 this Monday.

The company’s market cap has collapsed from over $3.8 billion to roughly $520 million. Citigroup, Cantor, Truist, and Evercore downgraded the stock to a Sell rating.

A class action lawsuit alleges the company misled investors about its strategy.