Gemini Begins Reimbursing Earn Users, Following Genesis Bankruptcy Settlement
Summary:
Gemini, a leading cryptocurrency exchange, has begun reimbursing its Earn program users following its discontinuation. The users received a total of $2.18 billion in digital assets, accounting for 97% of the assets owed following a payments interruption by former partner, Genesis. The payout, which includes any asset appreciation, was facilitated through a bankruptcy settlement with Genesis and other creditors. Genesis Global, part of the Digital Currency Group, was approved by courts to return $3 billion in cash and cryptocurrency to creditors, marking an unprecedented recovery in crypto bankruptcies. Gemini stresses that Genesis' bankruptcy was a result of traditional financial fraud, not cryptocurrency issues. The New York Attorney General’s office had earlier secured a $2 billion settlement with Genesis over investor fraud claims.
Gemini, a cryptocurrency exchange, has initiated the process of compensating the participants of its now obsolete loan scheme called Earn. As per the recent update, on May 29, users that earlier participated in Gemini's Earn program have been recompensed with $2.18 billion in digital assets, which accounts for 97% of the total amount owed. This represents a recovery of 232% after withdrawals were temporarily stopped by a previous Gemini Earn ally, Genesis. The shared information includes that if a user had lent one Bitcoin via the Earn program, they will get one Bitcoin in return, maintaining any asset appreciation since the lending process. This payout to the users was made possible due to a settlement with Genesis and other creditors involved in the insolvency proceedings. Genesis Global, a digital money lender under the Digital Currency Group (DCG), applied for bankruptcy in January 2023 after a standstill on withdrawals due to a liquidity crisis in November 2022. Genesis has been greenlighted by a court to repay $3 billion in cash and cryptocurrency to its creditors. In the history of cryptocurrency insolvencies, this marks an unparalleled recovery. An agreement in principle was reached with Genesis and other creditors, ensuring all Earn users will receive 100% of their digital assets in kind. On May 20, New York's chief legal officer Letitia James disclosed that her office had secured a $2 billion agreement with Genesis addressing allegations of investor fraud. The agreement mandates Genesis to refund investors and end its operations in New York. Genesis faces charges of misguided investors who deposited over $1.1 billion via Gemini's Earn program. Gemini reiterates that Genesis' bankruptcy wasn't a cryptocurrency issue but a case of traditional financial fraud exacerbated by regulatory ambiguity. Genesis was one among many cryptocurrency firms that declared bankruptcy after the turbulent incident with FTX in November 2022.
Published At
5/29/2024 6:29:43 PM
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