Gemini to repay Earn customers $2.18 billion 

Gemini Earn users will receive three times the value of assets locked in the lending product after the fiascos with FTX and Genesis.

On Wednesday, crypto exchange Gemini announced plans to repay $2.18 billion worth of cryptocurrency to creditors. The in-kind refund represents a 232% recovery for Earn users who were previously stuck in bankruptcy limbo.

Gemini’s lending partner, Genesis, a subsidiary of Digital Currency Group (DCG), was caught in FTX’s 2022 collapse. The turbulence effectively blocked over $940 million in withdrawals from the Earn product, which is used by more than 230,000 users.

Gemini co-founders Cameron and Tyler Winklevoss accused Genesis, DCG, and DCG CEO Barry Silbert of defrauding investors, while Genesis entered a protracted bankruptcy amid a public legal dispute. New York authorities sued all three firms, and the crypto exchange eventually paid a $37 million fine and agreed to recover $1.1 billion for Earn investors in February.

Today, Earn users received $2.18 billion of their digital assets in kind. These starting distributions represent:

• 97% of digital assets are owed to Earn users
• $1 billion more than when Genesis suspended withdrawals
• A 232% improvement since Genesis suspended withdrawals…

— Gemini (@Gemini) May 29, 2024

In its refund statement, the firm said its issue with Genesis was “an old-fashioned financial scam resulting from a lack of regulatory clarity” rather than a crypto issue. As a sign of goodwill, the exchange allocated $50 million to help Earn users recover from an unprecedented bankruptcy.

Several other beleaguered firms in cryptocurrency’s 2022 black swan year are also finalizing creditor repayment plans. FTX legacy expects to return up to 142% of customer funds and bring together more than two million creditors; This is making a difference in crypto prices since it filed for Chapter 11 protection.