Gemini Earn Recovers 97% Of Customers’ Lost Crypto

Gemini's bankrupt cryptocurrency lending arm has recovered nearly all of its clients' digital assets, marking one of the industry's most successful recoveries from insolvency to date.

The cryptocurrency exchange, founded by billionaire entrepreneurs Cameron and Tyler Winklevoss, announced on Wednesday that Gemini Earn customers “received $2.18 billion of their digital assets in-kind.”

Gemini gains full recovery

“This means, for example, that if you lend one bitcoin on Earn, you will get one bitcoin back,” Gemini to explain Via Twitter. “This means that you will receive full appreciation for your assets since you loaned them to the Earn Program.”

The announcement was well received by the online cryptocurrency community, which praised the exchange's leadership for acting responsibly after the loss of its clients' funds within Genesis Global. “Strong commitment from Tyler and Cameron as Gemini itself fills the $50 million hole created by losses from DCG/genesis, to make all users of their profits whole,” books Blockstream CEO Adam Back responded.

Both Genesis and Gemini collapsed in the wake of the fallout from FTX and Alameda Research in late 2022. Last week, Genesis won court approval for its bankruptcy plan to repay more than $3.5 billion to its creditors.

One of those creditors was Gemini, which would lend customer assets under its Earn program to Genesis for returns.

The latter's collapse led to a tumultuous wave of fraud accusations and lawsuits between Gemini, Genesis and Digitalcurrency Group, and a $2 billion settlement deal with New York Attorney General Letitia James last week.

Less successful crypto bankruptcies

Gemini's recovery stands out compared to the recovery of other collapsed cryptocurrency companies in 2022, which were only able to recover a small portion of the stolen assets for their clients.

At most, companies like FTX and Celsius promised to compensate customers 100% in cash rather than cryptocurrency terms, representing a massive opportunity cost for investors whose assets would have risen significantly since the time of each company's bankruptcy.

By contrast, Gemini said its repayment exceeded $1 billion when it froze withdrawals, representing an asset recovery of 232% in US dollars.

After a successful recovery, Gemini asserted that Genesis was solely responsible for its bankruptcy.

“The Genesis bankruptcy was not a problem for cryptocurrencies,” the company said. “It was an old-fashioned financial fraud exacerbated by a lack of regulatory clarity.”