Gemini to repay Earn customers $2.18 billion

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As a researcher with experience in the cryptocurrency industry, I’m relieved to see Gemini taking steps to make things right for their Earn users after the debacles with FTX and Genesis. The $2.18 billion worth of assets returned represents a significant recovery for those affected, providing a much-needed boost for the community.

Users of Gemini Earn can look forward to receiving three times the worth of their assets secured in Gemini’s lending program, following the recent challenges with FTX and Genesis.

As a financial analyst, I can share that on Wednesday, Gemini disclosed its intention to compensate creditors with approximately $2.18 billion in cryptocurrency. This form of redemption signifies a 232% restoration for former Earn users who were previously in a state of uncertainty due to bankruptcy proceedings.

In the 2022 collapse of FTX, Gemini’s collaborator in lending, Genesis – a subsidiary of Digital Currency Group (DCG) – encountered significant difficulties. These challenges halted withdrawals for approximately $940 million held within the Earn product, affecting over 230,000 users.

Genesis experienced a lengthy bankruptcy filing as a result of a heated legal controversy in the public sphere. The Winklevoss brothers, co-founders of Gemini, brought accusations against Genesis, Digital Currency Group (DCG), and DCG’s CEO Barry Silbert for defrauding investors. New York authorities filed lawsuits against all three entities, leading Genesis to pay a fine of $37 million and commit to recovering $1.1 billion for Earn investors in February.

Today, the digital assets belonging to Earn users were distributed in kind, amounting to a total of $2.18 billion. This initial distribution covers:

— Gemini (@Gemini) May 29, 2024

The firm’s statement in the repayment document attributed its issues with Genesis not to crypto-related concerns, but rather to outdated financial fraud and ambiguous regulatory frameworks. In a remarkable gesture of confidence, Genesis set aside $50 million to safeguard Earn users’ recoveries in an unprecedented bankruptcy scenario.

As a financial analyst examining the current state of the crypto industry, I can confirm that various other distressed crypto firms from the tumultuous year of 2022 are actively working on creditor repayment plans. The FTX estate, for instance, projects the return of up to 142% of customer funds and the satisfaction of over two million creditors, taking into consideration the fluctuation in crypto prices since their Chapter 11 filing.

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2024-05-30 00:03