Gemini Earn users will receive three times the value of assets locked in the disaster lending product with FTX and Genesis.
On Wednesday, cryptocurrency exchange Gemini Announce It plans to repay creditors $2.18 billion worth of cryptocurrencies. The in-kind payment represents a 232% recovery for Earn users who were previously left in bankruptcy.
Gemini's lending partner, Genesis, a subsidiary of Digital Currency Group (DCG), was caught up in the FTX collapse in 2022. The disruption effectively blocked withdrawals of more than $940 million in the Earn product used by more than 230,000 users.
Genesis has entered a long-running bankruptcy due to a public legal dispute, in which Cameron and Tyler Winklevoss, co-founders of Gemini, Genesis and DCG, and DCG CEO Barry Silbert are accused of defrauding investors. New York authorities sued the three companies, and the cryptocurrency exchange eventually paid $37 million in fines while agreeing to recover $1.1 billion to Earn investors in February.
In its repayment statement, the company said its issue with Genesis “was an old-fashioned financial fraud exacerbated by a lack of regulatory clarity,” not a cryptocurrency issue. As a show of good faith, the exchange set aside $50 million to ensure the recovery of Earn users in an unprecedented bankruptcy outcome.
Several other companies beleaguered from the 2022 cryptocurrency black swan year are finalizing creditor repayment plans. FTX expects to return up to 142% of customer funds and fully compensate more than 2 million creditors, representing the difference in cryptocurrency prices since filing for Chapter 11 protection.
