Gemini begins the process of reimbursing users of its now defunct loan program, Earn.
Cryptocurrency exchange Gemini has begun the process of refunding users of its now-defunct lending program, Earn.
According to an announcement, Gemini's Earn users received $2.18 billion in digital assets on May 29, representing 97% of the assets owed to users and a 232% recovery following the discontinuation of withdrawals by Genesis, a former partner of Gemini Earn.
"This means, for example, that if you lent a Bitcoin in the Earn program, you will receive one Bitcoin back. And it means that you will receive all the appreciation of your assets since you lent them in the Earn program," reads the statement on X .
The distribution of funds was the result of an agreement reached with Genesis and other creditors in the bankruptcy process. Genesis Global, a cryptocurrency lender part of the Digital Currency Group (DCG), filed for bankruptcy in January 2023 after suspending withdrawals amid a liquidity crisis in November 2022. A court recently approved the return of $3 billion in cash and cryptocurrencies to its creditors.
"This represents an unprecedented recovery among cryptocurrency bankruptcies [...] we have reached an agreement in principle with Genesis and other creditors [...] that will result in all Earn users receiving 100% of their assets digital in kind".
New York Attorney General Letitia James announced on May 20 that her office secured a $2 billion settlement with Genesis to address investor fraud claims. The settlement ordered Genesis to return funds to investors and cease operations in New York. Genesis has been accused of misleading investors, who deposited more than $1.1 billion through the Gemini Earn program.
“Finally, it is important to note that the Genesis bankruptcy was not a crypto problem. “It was an old-fashioned financial fraud aggravated by a lack of regulatory clarity,” Gemini said in the statement. Genesis was one of several cryptocurrency companies that filed for bankruptcy following the dramatic FTX debacle in November 2022.
