Winklevoss twins’ crypto venture under fire due to tax hike
Cryptocurrency exchange Gemini has sparked anger from its customers by introducing a high monthly fee for using its custody service.
The decision follows reports of major job cuts at the company, which has experienced the ups and downs of crypto market cycles since it was founded by high-profile founders Cameron and Tyler Winklevoss in 2014.
A Gemini client, speaking to Asia Markets on condition of anonymity, says he received an email from the exchange revealing that he will be charged a minimum monthly fee of $30 for each asset stored in custody from September 1.
Currently, Gemini’s digital asset storage fees are 0.40% per year, per asset, which for small to medium-sized owners will amount to much less than $30 per month.
“We understand that the new fee structure may affect 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.”
An apparent misspelling of three words in the letter called into question whether the email was actually sent out by scammers, but Asia Markets inquiries have shown the email to be legitimate.
Gemini offers two types of accounts for its users – a “custodial” account for long-term storage, and a “primary” account for daily trading.
It is possible for customers to transfer to their primary accounts, but the fee to do so is $125.
This means that someone who joined Gemini hoping to hold their crypto for a long time now has a decision to make.
Our source says he has no choice but to move his belongings because the $30 per month fees would very quickly eat into his inventory.
“This is not what I signed up for,” he said.
“For example, I’m now going to move five Litecoins to my primary account and it will cost me two of those Litecoins in transfer fees for the privilege. It’s the same for many of my smaller holdings. I’m snookered.
“Of course, one day I would have had to pay the withdrawal fee, but I planned to hold on long enough that $125 would only be a small percentage of what my stack is worth.”
It’s worth noting that Gemini’s website currently doesn’t mention the $30 fee, so a new user could easily fall into what our source describes as a “trap.”
In the screenshot above, you’ll see that Gemini shows a fee schedule from June 24, 2022, but doesn’t mention the upcoming hike.
Asia Markets has contacted Gemini for comment but has yet to receive a response. This article will be updated if and when the answer comes.
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