Gemini Earn users are set to receive triple the value of the assets initially locked in the lending product following issues with FTX and Genesis.

Gemini Announces Repayment Plans

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

Gemini’s lending partner, Genesis, a subsidiary of Digital Currency Group (DCG), was impacted by the FTX crash in 2022. The event blocked withdrawals for over $940 million held in the Earn product, which was used by more than 230,000 users.

Genesis Bankruptcy and Legal Disputes

Genesis entered a prolonged bankruptcy due to a public legal dispute. Gemini’s co-founders, Cameron and Tyler Winklevoss, accused Genesis, DCG, and DCG CEO Barry Silbert of defrauding investors. New York authorities also sued these firms. Eventually, the crypto exchange paid $37 million in fines and agreed to recover $1.1 billion for Earn investors in February.

In a recent update, 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
  • A 232% recovery from when Genesis halted withdrawals

“The issue with Genesis was old-fashioned financial fraud compounded by a lack of regulatory clarity,” said the firm in a repayment statement.

As a gesture of goodwill, Gemini allocated $50 million to ensure Earn users’ recovery in this unprecedented bankruptcy outcome.

Other Crypto Firms Finalizing Repayment Plans

Several other firms affected by the crypto industry’s turbulent year in 2022 are also finalizing creditor repayment plans. The FTX estate expects to return up to 142% of customer funds, aiming to make over two million creditors whole. This calculation takes into account the difference in crypto prices since filing for Chapter 11 protection.

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