Gemini Earn recovers 97% of lost crypto from customers

The bankrupt crypto-lending arm of Gemini has successfully recovered virtually all of its clients’ digital assets, marking one of the industry’s most successful recoveries from insolvency to date.

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

The full recovery of Gemini Earn

“This means, for example, that if you had lent a bitcoin to the Earn program, you will receive a bitcoin back,” Gemini explained on Twitter. “And it means that you will receive any appreciation in your assets since you loaned them to the Earn program.”

The announcement was well received by the online crypto community, which applauded the exchange’s leadership for acting responsibly after losing its customers’ funds to Genesis Global. “Solid commitment from Tyler and Cameron, where Gemini has filled a $50 million gap caused by DCG/genesis losses, to get all of their users whole,” wrote Blockstream CEO Adam Back in response.

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

One such lender was Gemini, which would lend assets from customers under its Earn to Genesis program to generate returns.

The latter’s collapse led to a tumultuous back-and-forth of fraud allegations and lawsuits between Gemini, Genesis, Digital Currency Group and a $2 billion settlement agreement with New York Attorney General Letitia James. last week.

Less successful crypto failures

Gemini’s recovery stands out from other crypto companies that fell in 2022, which have only managed to recover a portion of their customers’ stolen assets.

At most, companies like FTX and Celsius pledged to refund clients 100% in cash instead of crypto terms, representing a massive opportunity cost to investors whose assets would have appreciated massively since time of each company’s insolvency.

By contrast, Gemini said its repayment is $1 billion more than when it froze withdrawals, representing a 232% asset recovery in dollar terms.

After the successful recovery, Gemini maintained that Genesis was solely responsible for its bankruptcy.

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

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