- Bitcoin and the broader cryptocurrency world have been abuzz with a significant development involving a $2 billion crypto repayment to customers.
- Genesis, a bankrupt crypto lending firm, and Gemini, a cryptocurrency exchange, have successfully returned over $2 billion in crypto to individual customers.
- According to a statement from Gemini today, the jointly managed Gemini Earn program’s 232,000 customers have achieved a staggering 242% return on assets locked since January 2023.
Discover how Genesis and Gemini managed to return over $2 billion in crypto to their customers, marking a significant milestone in the cryptocurrency world.
Genesis and Gemini’s Remarkable Crypto Repayment
Genesis, unlike other crypto companies that went bankrupt following the 2022 market crash, managed to return assets to customers in the form of cryptocurrency rather than liquidating a limited pool of assets and repaying in cash. This means that customers who lent Bitcoin to Genesis could benefit from the dramatic price increase of the coin since the company’s bankruptcy. Bitcoin’s price has more than tripled since January 2023, surpassing $67,000.
Gemini Earn Program’s Impressive Returns
Gemini’s co-founder, Cameron Winklevoss, expressed excitement about the recovery for their customers, acknowledging the challenges of the long process and appreciating the continuous support and patience of their customers. Approximately 97% of the repayment will be received by Gemini customers immediately, with the remaining balance to be paid within 12 months. Genesis had previously estimated that customers, including larger investors not part of the Earn program, would receive a 77% repayment in the event of bankruptcy. Gemini noted that its customers benefited from agreements allowing Genesis to sell shares in Grayscale Bitcoin and Ethereum trusts, in addition to a $50 million settlement contribution made by Gemini.
Legal and Regulatory Implications
When Genesis froze customer accounts in November 2022, the total value of Gemini Earn assets was $940 million. New York Attorney General Letitia James alleged that the Gemini Earn program was a “deception” that misled investors, leading to a lawsuit against Genesis, Gemini, and Genesis’s parent company, Digital Currency Group (DCG). In February, James reached a settlement with Genesis, requiring the firm to prioritize repayments to Earn customers over other creditors, including the state of New York and DCG.
Conclusion
The successful repayment of over $2 billion in cryptocurrency to customers by Genesis and Gemini marks a significant achievement in the crypto industry, highlighting the potential for recovery even in the face of bankruptcy. This development not only restores confidence among investors but also sets a precedent for how crypto firms can navigate financial distress while prioritizing customer interests.
