Customers of the defunct crypto lending program run by Gemini, a crypto exchange owned by the Winklevoss twins, will finally start receiving their funds. Gemini announced that it will be returning $2.18 billion of digital assets to users of its Earn program, which had withdrawals paused in November 2022. Approximately 97% of the digital assets owed to users as of the suspension date will be available in their Gemini accounts. This marks a 232% recovery for users since withdrawals were frozen 18 months ago.
The Earn program was first launched in 2021, allowing customers to earn high yields on their coins by storing them in Gemini’s scheme. Gemini would then lend customers’ crypto to institutional borrowers through Genesis Global Capital, its lending partner. However, in November 2022, Genesis Global Capital paused new loan originations and redemptions, leading to Gemini halting withdrawals from the Earn program. Genesis filed for Chapter 11 bankruptcy protection in January in Manhattan federal court.
The email sent to customers by Gemini states that they will receive 100% of their digital assets back in kind as a result of the settlement with Genesis and other creditors in the Genesis Bankruptcy. This means that if a customer lent one bitcoin in the Earn program, they will receive one bitcoin back, along with any increase in value that their assets have seen since lending them into the program. This settlement comes after the New York Attorney General Letitia James announced a $2 billion settlement with Genesis to repay defrauded investors last week.
Gemini’s announcement of returning the funds to customers is a significant step in addressing the issues caused by the pausing of withdrawals from the Earn program. The recovery of 232% for users is an encouraging outcome, and users will finally be able to access their digital assets once again. The email sent to customers will provide them with the necessary information and reassurance that their funds are being returned to them in full.
This settlement and distribution of funds highlight the importance of transparency and accountability in the crypto industry. It also serves as a reminder to customers to carefully consider the risks involved in participating in crypto lending programs and to be cautious when dealing with lending partners. Overall, this development is a positive one for users of Gemini’s Earn program, who can now look forward to getting their money back and moving forward with their crypto investments.
