Gemini Earn Investors Protest Proposal Cutting Bitcoin Payouts to 30% Market Value
Summary:
Gemini Earn investors express discontent over a proposed reorganization plan that could limit their Bitcoin payouts to roughly 30% of its current market value. The plan suggests that creditors gain a payout equal to their cryptocurrency balances as of January 19, 2023, the day Genesis Global Capital filed for bankruptcy. Despite an increase in crypto prices since January, critics claim creditors could only get 61% of their crypto's value from that date. Gemini Trust is now trying to recover $1.6 billion from Genesis for Earn users. Creditors have until January 10, 2024, to vote on the proposed plan.
There's rising discontent among Gemini Earn investors over a proposed scheme that could reduce their anticipated Bitcoin (BTC) payments to roughly 30% of the current market valuation. On December 13, Gemini Trust disclosed via an X post that it had forwarded an email to creditors detailing this recommended plan that is now up for voting. According to this plan, creditors' payout will match their Earn crypto debts as of January 19, 2023 - the day on which Genesis Global Capital, Gemini’s crypto lending associate, declared bankruptcy.
Analysts, including James Seyffart from Bloomberg, have labeled this scheme as harsh. This is especially considering the significant rise in Bitcoin and Ether (ETH) prices from $20,940 and $1,545 respectively as they were at filing time, to their present values — $42,750 for Bitcoin and $2,250 for Ether.
Based on these comparisons, creditors stand to receive a modest 61% at worst of their January 19, 2023, crypto value. Therefore, for each BTC held on Earn, a creditor would receive a mere $12,773, which is just 30% of its current worth. Unsurprisingly, this aroused strong reactions among Gemini’s X post commentators, with many urging fellow creditors to vote against it.
Multiple X (formerly Twitter) users voiced their disapproval, among them, Andrew Aleid, remarked, "This is an outright insult. An absolute shame.” Whereas, Ian Malcolm accused Gemini Trust of stealing their money and asked for every single dollar to be refunded.
Other users like BC argued that they should be reimbursed in full, saying "Anything less is unacceptable." The scheme has been put forward due to a deficit of funds after the bankruptcy of Genesis, the crypto lending partner in the Earn program.
Gemini Earn was initiated as a passive income stream for users invested in crypto. To manage the program, Gemini withdrew several hundred million dollars from Genesis before insolvency. The cryptocurrency exchange is currently seeking to recover a staggering $1.6 billion from Genesis for Earn participants.
Creditor voting on the plan is scheduled to end on January 10, 2024, at 4 pm Eastern Standard Time. In the event of approval, the supervising bankruptcy court is set to deliver the final verdict on February 14, 2024.
Published At
12/14/2023 8:04:50 AM
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