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This unprecedented outcome paves the way for all Earn users to receive 100% of their digital assets back in kind.
NEW YORK, May 29, 2024 /PRNewswire/ -- Today, Earn users received $2.18 billion of their digital assets in kind. These initial distributions represent:
- 97% of digital assets owed to Earn users
- $1 billion more than when Genesis halted withdrawals in November 2022
- A 232% recovery from when Genesis halted withdrawals in November 2022
The notional dollar value of digital assets returned to Earn customers is based on digital asset prices as of May 28, 2024 at 10 am ET.
The Earn program was an optional crypto lending program through which Gemini customers could lend funds to Genesis, a third-party borrower. After Genesis halted redemptions in November 2022 and filed for bankruptcy in January 2023, approximately 232,000 Earn users lost access to the digital assets they had lent to Genesis. At the time, these digital assets were worth approximately $940 million.
This represents an unprecedented recovery among crypto bankruptcies, as well as bankruptcies in general, and follows Gemini's previous announcement that it reached a settlement in principle 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.
This means, for example, that if a customer lent one bitcoin in the Earn program, they will receive one bitcoin back. This ensures that customers will benefit from any and all appreciation of their digital assets since they lent them into the Earn program.
In order to ensure this successful resolution, Gemini has also contributed $50 million to the Earn users' recovery.
"We are thrilled that we have been able to achieve this recovery for our customers. We recognize the hardship caused by this lengthy process and appreciate our customers' continued support and patience throughout," said Cameron Winklevoss, Co-Founder and President of Gemini.
Today's initial distributions represent approximately 97% of the digital assets in the Earn program. Earn customers can expect to receive their remaining asset balance within the next 12 months.
This outcome would not have been possible without the tireless efforts of the Gemini team. Amidst the broad market turmoil in the summer of 2022, Gemini entered into a security agreement in which Genesis promised to deliver to Gemini over 62 million shares of the Grayscale Bitcoin Trust (GBTC) to secure all of the loans made by Earn users to Genesis through the Earn program. Even though Genesis failed to deliver more than half of the promised collateral to Gemini, Gemini was able to use the delivered collateral to achieve today's recovery.
"It's important to note that the Genesis bankruptcy was not a crypto problem," said Tyler Winklevoss, Co-Founder and CEO of Gemini. "It was old-fashioned financial fraud compounded by a lack of regulatory clarity. To that end, we will continue to fight for clear rules and guidance for our industry that foster both innovation and consumer protection. And we will win this fight. The future is bright."
About Gemini
Gemini is a global crypto platform founded by Cameron and Tyler Winklevoss in 2014. Gemini offers a wide range of crypto products and services for individuals and institutions in over 70 countries. Gemini's simple, reliable, and secure products are built to unlock the next era of financial, creative, and personal freedom.
source: Gemini
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