New York-based cryptocurrency exchange Gemini announced late Wednesday that the parties involved in the bankruptcy of cryptocurrency lending company Genesis have agreed to return $1.1 billion in digital assets to users of the platform’s Earn program.
“We have finally reached an agreement in principle with Genesis and other creditors in the Genesis bankruptcy, subject to approval by the Bankruptcy Court. This will result in all Earn users receiving 100% of their digital assets back in kind,” the company wrote.
Revenue Update: Today we are pleased to announce that we have reached an agreement in principle with Genesis and other creditors regarding the Genesis bankruptcy, which will result in all revenue users receiving 100% of their digital assets if approved by the Bankruptcy Court. again…
— GeminiTrustCo (@GeminiTrustCo) February 28, 2024
Founded in 2014 by Cameron and Tyler Winklevoss, Gemini, also known as Gemini Trust Company, provides a cryptocurrency exchange as well as a wide range of financial services, including cryptocurrency staking, cryptocurrency wallets, cold storage, credit card services, and Nifty Gateway NFTs. market.
Last October, the New York Attorney General’s Office (NYAG) filed suit in the U.S. Bankruptcy Court for the Southern District of New York against Gemini, digital asset lender Genesis, and Digital Current Group for defrauding investors. I raised it.
“These cryptocurrency companies lied to investors and attempted to hide losses of more than $1 billion, and it was middle-class investors who suffered as a result,” New York Attorney General Letitia James said at the time. “Hard-working New Yorkers and investors across the country lost more than $1 billion because they were told outright lies that their money would be safe and grow if they invested in Gemini Earn.”
After the collapse of cryptocurrency exchange FTX in 2022, a pandemic swept through the cryptocurrency market. One of the companies caught up in the bloodbath is Genesis Trading. In November 2022, Genesis suspended loan services, warning customers of the possibility of bankruptcy.
The following week, Gemini sued Genesis for control of $1.6 billion in Grayscale Bitcoin Trust stock.
According to Gemini, participants in the Earn program will receive the same amount of Bitcoin as originally lent, plus any subsequent realized increase in value.
“If approved, it would return a value of more than $1.8 billion (at current prices),” Gemini said. “That’s $700 million more than when Genesis stopped drawing on November 16, 2022.”
As part of the settlement, Gemini said the exchange would contribute $40 million to help recover user funds.
Gemini estimates that once approved, Earn users will receive approximately 97% of their assets in-kind within approximately two months, with the remaining balance of assets within the next 12 months.
“In principle, agreements are subject to final documentation,” Gemini warned. “It may take up to two months to complete the necessary bankruptcy court proceedings, and we will keep Earn users informed throughout the process.”
Gemini did not respond immediately detoxification Request for comment.
The company said it was aware of the difficulties customers had experienced through the settlement process and expressed gratitude to customers for their patience and support.
“As responsible stewards of the cryptocurrency ecosystem, we know that our clients value the ability to hold their digital assets through the ups and downs of the cryptocurrency market cycle,” Gemini wrote. “The idea is that assets can be returned on a coin-to-coin basis. It was very important to us to provide that to our customers.”
Edited by Ryan Ozawa.