Gemini Refunding $1.1 Billion to Earn Clients, Agrees $37M Fine in New York Settlement

Gemini Refunding $1.1 Billion to Earn Clients, Agrees $37M Fine in New York Settlement

The New York-based crypto exchange Gemini revealed in a statement late Wednesday, February 28, that parties in Genesis’s ongoing bankruptcy case will receive a full refund of their digital assets alongside the market gains. 

Agreement Ends Earn Participants Wait

Gemini announced the resolution was realized with parties in the ongoing suit of crypto lender Genesis to return the $1.1 billion claimed by the participants of the Earn program. 

The company revealed settling in principle with creditors and Genesis in the ongoing bankruptcy suit. The agreement awaits approval by the Bankruptcy Court to enable the Earn program users to receive all the digital assets in kind. 

Gemini is a crypto exchange established by Camero Winklevoss in 2014, assisted by twin brother Tyler Winklevoss. The exchange runs as Gemini Trust Company and specializes in offering broader financial services, including staking, crypto wallets, credit card services, and cold storage. Besides crypto exchange services, it runs the Nifty Gateway NFT (non-fungible token) marketplace. 

Reflection on Gemini-Genesis Legal Contest

The agreement ends the lengthy legal tussle that embroiled the Winklevoss duo against Digital Currency Group and Genesis executives. The contest attracted the attention of the New York Attorney General’s (NYAG) office last year, culminating in a lawsuit within the US Bankruptcy Court within the New York Southern District where the prosecutor alleged Gemini alongside crypto lender Genesis and parent firm Digital Currency Group (DCG) defrauded the investors. 

The New York Attorney General Letitia James revealed in the submission that the trio of crypto companies misled the investors and attempted to conceal over a billion-dollar loss. The NYAG added that the middle-class investors fell victim to the fraudulent scheme orchestrated by the trio. 

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James sympathized with the hardworking New Yorkers who lost over a billion-dollar fortune, convinced by the blatant lies that the trio fed to them. The attorney indicated that the trio lied about the investors’ money being assured of safety and would grow when invested within the Gemini Earn. 

The dispute pitting the parties behind the Gemini Earn initiative traces to the sudden implosion of the crypto exchange FTX in November 2022. The collapse triggered a contagion that swept Genesis in the blood bath that radiated across the crypto market. 

The FTX-fueled crisis prompted Genesis to suspend lending services in a November 2022 statement. The crypto lender hinted at a potential bankruptcy filing. The move prompted Gemini to level charges against Genesis, seeking to control Grayscale Bitcoin Trust (GBTC) shares valued at $1.6 billion. 

The Wednesday update offers a reprieve for the Earn program participants as Gemini disclosed that they would receive the Bitcoin amount they originally lent. Besides, they would benefit from the value realized since the suspension of services. 

Gemini approximated that the approval of the proposal would facilitate a return of $1.8 billion in value as per Wednesday’s prices. The approval of the agreement would imply that the customers would receive $700 million in value than the amount when Genesis suspended withdrawals on November 16. 

Gemini Announces Coin-for-Coin Return for Assets for Earn Participants

Gemini revealed that it would contribute $40 million that will settle user funds in the settlement process. The approval will see the Earn users receive 97% of the assets in-kind in the next two months. The remaining asset balance would be returned next year. 

The settlement, in principle, has yet to undergo definitive documentation. The process could take 60 days to complete, necessitating regular updates conveyed to the Earn users. 

Gemini acknowledged the hardship borne by the customers during the delayed settlement process. The crypto exchange company hailed the patience and support exercised by the Earn customers. 

Gemini reiterated its credentials as responsible stewards within the digital assets ecosystem. It reflected the customers’ awareness of the ups and downs experienced when holding digital assets in diverse market cycles. 

Gemini hailed the achievement by honoring the capability to return assets to the customers without wastage and loss. 

Editorial credit: Poetra.RH /

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