Gemini, the cryptocurrency exchange founded by the Winklevoss twins, has made a significant announcement regarding its Earn program. Users who participated in Gemini Earn are set to receive their digital assets back in-kind, resulting in an impressive 232% recovery from when withdrawals were halted by their partner, Genesis Global Capital, in November 2022.
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What Does “In-Kind” Recovery Mean?
When Gemini says that users will receive their assets “in-kind,” it means that they will get the exact same type and quantity of digital assets they initially deposited. For example, if a customer lent one bitcoin to the Earn program, they will receive one bitcoin back. This approach ensures fairness and transparency for users.
The Numbers
Gemini Earn users have received a total of $2.18 billion worth of digital assets back in-kind. This substantial recovery is a testament to Gemini’s commitment to its users. The recovery percentage is calculated based on the value of the assets returned compared to when withdrawals were halted. Since then, bitcoin has surged over 200%, according to CoinDesk Indices data.
Genesis Settlement and Gemini’s Advocacy
The recovery process was not without its challenges. The relationship between Gemini and Genesis has been contentious, resulting in lawsuits and regulatory scrutiny. In October 2023, Gemini sued Genesis Global Capital for $1.6 billion over 60 million Grayscale Bitcoin Trust (GBTC) shares pledged as collateral. Genesis, in turn, sued Gemini to recover $689 million, alleging preferential transfers that unfairly benefited Gemini at the expense of other creditors.
Despite these legal battles, Gemini remained steadfast in its goal to recover 100% of its users’ digital assets from Genesis. Anson Frelinghuysen, a partner at Hughes Hubbard & Reed LLP and Gemini’s lead bankruptcy counsel, emphasized that Gemini advocated for its users throughout the restructuring process. As a result, they achieved an unprecedented 232% overall recovery for Gemini Earn users.
What’s Next?
Gemini has already distributed 97% of the digital assets to Earn users, with the remaining balance expected within the next 12 months. The successful resolution of the Earn program demonstrates Gemini’s commitment to transparency, fairness, and its users’ best interests.
Gemini’s announcement is a positive development for the crypto community, showing that even in challenging circumstances, exchanges can prioritize their users’ interests and work towards a favorable outcome.
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