TL;DR
- Gemini’s Agreement with Genesis: Gemini has announced a preliminary agreement with Genesis to restore digital assets to its Earn users, with a strategy to distribute $1.8 billion, surpassing the initial amount by $700 million due to asset appreciation.
- Settlement and Recovery: If approved by the Bankruptcy Court, Earn users are expected to receive approximately 97% of their assets in kind within the forthcoming two months, with the remaining assets returned over the subsequent 12 months.
- Consequences of Gemini’s Shortcomings: Gemini will incur a $37 million penalty for significant shortcomings that jeopardized the company’s stability and safety, and is set to donate $40 million to the Genesis Global Capital bankruptcy to benefit Earn customers.
In a crucial turn of events for those impacted by the downfall of Genesis, the parent firm of the Earn program, the cryptocurrency exchange Gemini has announced an upcoming agreement to restore digital assets to its Earn users. This announcement, made on February 28, 2024, brings a glimmer of hope to those affected by the insolvency.
Gemini has arrived at a preliminary agreement with Genesis, outlining a strategy to distribute $1.8 billion to Earn users. The process is set to commence within two months, subject to court approval. The settlement entails the return of digital assets to the impacted users, with the total value now surpassing the initial amount of $1.1 billion by $700 million due to asset appreciation since the cessation of withdrawals in November 2022.
If the Bankruptcy Court greenlights the settlement, Earn users are expected to receive approximately 97% of their assets in kind within the forthcoming two months. The remaining assets are anticipated to be returned over the subsequent 12 months. Gemini expresses its gratitude to the New York Department of Financial Services (DFS) for its contribution to this settlement, which ensures a coin-for-coin recovery for Earn users.
The Consequences of Gemini’s Shortcomings
As per the DFS, the firm will incur a $37 million penalty for significant shortcomings that jeopardize the company’s stability and safety. Furthermore, Gemini is poised to donate $40 million to the Genesis Global Capital bankruptcy, to benefit Earn customers, in collaboration with the Bankruptcy Court.
The Earn program, launched on February 1, 2021, enabled Gemini customers to loan their cryptocurrencies to the unregulated GGC. While customers accrued interest, Gemini’s failure to adequately supervise GGC led to a default on nearly $1 billion in loans by November 2022, culminating in GGC’s ensuing bankruptcy.
Gemini’s lack of vigilance and insufficient reserves left over 200,000 Earn customers unable to access their assets, inflicting both reputational and financial harm to Gemini and its users. The settlement announced today represents a victory for Earn customers, affirming their entitlement to the assets they entrusted to Gemini.
