After 18 months of freeze, crypto exchange Gemini announced on Wednesday that it will return $2.18 billion worth of digital assets to users of its Earn program. Withdrawals have been paused since November 2022. This restitution is part of a broader $2 billion settlement negotiated by the New York Attorney General with Gemini’s lending partner, Genesis.
The substantial fund distribution marks a 232% recovery for users since the freeze, bringing relief to customers of Gemini’s now-defunct crypto lending program. The settlement will facilitate the return of funds to individuals who had their assets locked up.
“Today, we are pleased to let you know that initial Earn distributions — approximately 97% of the digital assets owed to you by Genesis as of the suspension date (November 16, 2022) — are now available in your Gemini account,” Gemini tells its customers via email Wednesday, according to a report from CNBC.
The email continued, “This follows our previous announcement that we reached a settlement with Genesis and other creditors in the Genesis Bankruptcy, which will result in all Earn users receiving 100% of their digital assets back in kind.”
Gemini also clarified in the email: “This means that if you lent one bitcoin in the Earn program, you will receive one bitcoin back. And it means that you will receive any and all increase in the value of your assets since you lent them into the Earn program.”
As you may recall, Gemini and Genesis initially partnered in February 2021 to launch the Earn program, which promised yields of up to 8 percent. Earn enabled customers to achieve high yields on their crypto holdings by depositing them into Gemini’s system. Gemini then lent these assets to institutional borrowers through Genesis Global Capital.
However, the program faced regulatory scrutiny, leading to the Securities and Exchange Commission (SEC) charging both companies with selling unregistered securities. The situation worsened in November 2022 when Genesis Global Capital paused new loan originations and redemptions, prompting Gemini to halt Earn withdrawals. Genesis subsequently filed for Chapter 11 bankruptcy protection in January in a Manhattan federal court.
The settlement, announced last week by New York Attorney General Letitia James, is intended to repay investors who were defrauded. This significant resolution marks a turning point for affected users, restoring faith in the embattled crypto sector.
As Gemini users begin to receive their assets, this development underscores the ongoing challenges and regulatory pressures faced by the cryptocurrency industry.
Founded in 2015 by twin brothers Cameron and Tyler Winklevoss, Gemini is a cryptocurrency exchange to build a world-class digital asset exchange and custodian based in the United States. Gemini dubs itself a next-generation cryptocurrency exchange and a platform for buying, selling, storing, and earning cryptocurrencies including bitcoin and ether, and DeFi (Decentralized Finance) tokens. Gemini also allows customers to buy, sell, and store digital assets.
