For participants in the Earn program, Gemini claims that the resolution for cryptocurrency lender Genesis means complete returns of digital assets, including market gains.
The parties to the bankruptcy case of the cryptocurrency lending company Genesis have agreed to return $1.1 billion in digital assets to users of the platform’s Earn program, according to a late-breaking announcement from New York-based cryptocurrency exchange Gemini.
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The company stated, “We have finally reached a settlement in principle with Genesis and other creditors in the Genesis Bankruptcy that will result in 100% of their digital assets back in kind for all Earn users, if approved by the Bankruptcy Court.”
Gemini, formerly the Gemini Trust Company, was founded in 2014 by Cameron and Tyler Winklevoss. In addition to providing a cryptocurrency exchange, Gemini also provides a wider range of financial services, such as credit card services, cold storage, cryptocurrency staking, cryptocurrency wallets, and the Nifty Gateway NFT marketplace.
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The New York Attorney General’s office (NYAG) filed a lawsuit in October accusing Gemini, Digital Currency Group, and digital asset lender Genesis of defrauding investors in the Southern District of New York U.S. Bankruptcy Court.
At the time, New York Attorney General Letitia James stated, “These cryptocurrency companies lied to investors and tried to hide more than a billion dollars in losses, and it was middle-class investors who suffered as a result.” “Investors nationwide, including hardworking New Yorkers, lost over $1 billion as a result of being misled into believing that their money would increase and be safe in Gemini Earn.”
A contagion engulfed the cryptocurrency market following the 2022 collapse of FTX, an exchange for virtual currencies. Genesis Trading was one of the firms engulfed in the carnage. Genesis halted its lending services in November 2022 and forewarned clients of impending bankruptcy.
Gemini sued Genesis the next week to regain control of shares of the $1.6 billion Grayscale Bitcoin Trust.
Gemini claims that those who take part in the Earn program will get back the same quantity of Bitcoin that they initially lent, plus any appreciation that has since occurred.
According to Gemini, “if approved, we will be returning over $1.8 billion in value (at today’s prices).” “$700 million more than on November 16, 2022, when Genesis stopped taking withdrawals.”
Gemini stated that the exchange will also pay $40 million toward the recovery of user funds as part of the settlement.
According to Gemini, once approved, Earn users can anticipate receiving the remaining asset balance over the course of the following 12 months, as well as roughly 97% of their assets in kind within two months.
Gemini cautioned, “The settlement, in principle, is subject to definitive documentation.” “We will keep Earn users updated throughout the required Bankruptcy Court process, which could take up to two months to complete.”
The company acknowledged the difficulties its customers have faced during the settlement process and thanked them for their patience and support.
Gemini stated, “We understand that our customers value being able to hold onto their digital assets through the ups and downs of crypto market cycles, and as responsible stewards of the crypto ecosystem, we do so.” “It was essential to us to be able to return assets to our customers coin for coin.”
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