Gemini Earn users will receive three times the value of their assets locked in loan products following the FTX and Genesis fiasco.
On Wednesday, cryptocurrency exchange Gemini announced plans to repay $2.18 billion worth of cryptocurrencies to creditors. In-kind redemptions represent a 232% recovery for Earn users who were previously insolvent.
Genesis, a subsidiary of Gemini’s lending partner Digital Currency Group (DCG), was caught up in FTX’s 2022 collapse. The turbulence effectively blocked withdrawals of more than $940 million residing on Earn products used by more than 230,000 users.
Gemini co-founders Cameron and Tyler Winklevoss have accused Genesis, DCG and DCG CEO Barry Silbert of defrauding investors, with Genesis facing a public legal dispute. Entered into bankruptcy for a long time. New York authorities sued all three companies, and the cryptocurrency exchange eventually agreed to pay a $37 million fine and recoup $1.1 billion for Earn investors in February.
In its redemption statement, the company stated that the Genesis issue was not a cryptocurrency issue but rather “old-fashioned financial fraud exacerbated by a lack of regulatory clarity.” As a show of good faith, the exchange allocated $50 million to ensure the recovery of Earn users from the unprecedented bankruptcy consequences.
Several other companies under siege in cryptocurrency’s 2022 black swan year are also finalizing creditor repayment plans. FTX Assets expects to return up to 142% of customer funds and secure all of its more than 2 million creditors, which explains the difference in the price of the cryptocurrency since filing for Chapter 11 protection.