Winklevoss twins’ crypto venture under fire over fee hike
Cryptocurrency exchange Gemini has sparked anger from its customers by introducing a hefty monthly fee for use of its custody service.
The decision follows reports of major staff cuts at the company, which has experienced the highs and lows of crypto market cycles since being founded by high-profile entrepreneurs Cameron and Tyler Winklevoss in 2014.
One Gemini customer, speaking to Asia Markets on the condition of anonymity, says he received an email from the exchange revealing he’ll be charged a $30 minimum monthly fee for each asset stored in custody from September 1.
Currently, Gemini’s fees for storing digital assets is 0.40% per year, per asset, which for small to medium holders would amount to much less than $30 per month.
“We understand the new fee structure could impact your use of Gemini Custody,” the Gemini email said.
“While we hope you continue to use our Custody product, you can always transfer your funds to a Gemini exchange wallet and potentially benefit from more accessibility to your crypto.”
A glaring spelling mistake three words into the letter had some questioning whether the email was actually mailed out by scammers, but Asia Markets enquiries have established the email is legitimate.
Gemini offers two types of accounts for its users – a “custody” account for long-term storage, and a “primary” account for everyday trading.
It is possible for customers to transfer into their primary accounts, but the fee for doing so is $125.
This means someone who joined Gemini hoping to simply hold their crypto in custody for the long haul, now has a decision to make.
Our source says he has no choice but to move his assets, because the $30 per month fees would very quickly eat into his holdings.
“This is not what I signed up for,” he said.
“For example, I am now going to move five Litecoins into my primary account, and it will cost me two of those Litecoins in transfer fees for the privilege. It is the same for many of my smaller holdings. I’m snookered.
“Obviously, one day I would have needed to pay that withdrawal fee, but I was planning to hold for long enough that $125 would be only a small percentage of what my stack is worth.”
It is worth noting, that Gemini’s website currently makes no mention of the $30 fee, so a new user could easily fall into what our source describes as a “trap”.
In the screenshot above, you will see Gemini is showing a fee schedule as of June 24, 2022, but is making no mention of the upcoming hike.
Asia Markets has reached out to Gemini for comment, but is yet to receive a response. This article will be updated if and when that response is forthcoming.
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