Gemini’s Settlement with Genesis for Earn Program Users
Gemini has recently reached a settlement in principle with Genesis, outlining a plan to distribute $1.8 billion to Earn program users. The process is expected to start within two months, pending court decision.
Gemini’s Asset Recovery Plan
The settlement involves the restitution of digital assets to the affected users, with the total value now exceeding the original amount of $1.1 billion by $700 million due to asset appreciation since the halting of withdrawals in November 2022.
If the Bankruptcy Court approves the settlement, Earn program users should receive about 97% of their assets in kind within the next two months, with the remainder expected to be returned over the next 12 months.
Gemini expressed gratitude to the New York Department of Financial Services (DFS) for its role in the settlement, which delivers a coin-for-coin recovery for Earn program users. This means that users will receive the equivalent digital assets they had initially entrusted to the program.
According to the DFS, Gemini will pay a $37 million fine for major failures impacting the company’s stability and safety. Additionally, Gemini is set to contribute $40 million towards the Genesis Global Capital bankruptcy, aiming to benefit Earn customers, in coordination with the Bankruptcy Court.
GGC and Failed Earn Program
The Earn program, launched in February 2021, allowed Gemini customers to lend their cryptocurrencies to the unregulated GGC. Customers earned interest, but Gemini failed to properly oversee GGC, leading to a default on nearly $1 billion in loans by November 2022 and GGC’s subsequent bankruptcy.
This lack of diligence and inadequate reserves by Gemini resulted in over 200,000 Earn customers being unable to access their assets, causing both reputational and financial damage to Gemini and its users.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
