Gemini Earn To Return Funds After Genesis Bankruptcy Approval


Gemini Earn has announced plans to begin returning customers’ assets by the end of the month following the approval of Genesis’ bankruptcy plan. This is considered a significant development for the cryptocurrency community, particularly creditors.

This move comes after a U.S. court gave the green light to Genesis, a bankrupt crypto lender that collapsed due to the failures of the Terra/Luna ecosystem and Three Arrows Capital. The approved plan aims to distribute approximately $3 billion in cash and assets to creditors.

Judge Overrules Digital Currency Group’s Objection

U.S. Bankruptcy Judge Sean Lane approved Genesis’ bankruptcy plan. He also dismissed objections from Genesis’ parent company, Digital Currency Group (DCG), the Genesis Crypto Creditors Ad Hoc Group, and the Office of the United States Trustee.

Interestingly, DCG, in their January 2023 filing had contested that claims should be valued in U.S. dollars as of Genesis’ bankruptcy. They wanted the subsequent gains in the crypto market ignored. However, Judge Lane rejected this argument.

He ruled that DCG, as an equity holder, had no economic stake in the plan. Judge Lane maintained his decision, especially given the lack of sufficient value in the debtors’ estates to provide a recovery for DCG after paying unsecured creditors.

Differentiated Creditor Treatment

The approved plan introduces a multi-step process for asset allocation. There is a discrimination between creditors owed cryptocurrency and those owed U.S. dollars. While creditors with claims in U.S. dollars will receive 100% of their loan balance, those with crypto claims will bear a shortfall in funds.

Despite this ruling, DCG has every right to appeal. That will depend on their ability to provide legal grounds for an appeal. Legal experts consider the overwhelming asset shortfall as unhelpful to their case.

Gemini Earn’s Reimbursement Strategy

Gemini, owned by the Winklevoss twins, has hailed the decision of Judge Lane. It stated the judgment does not affect the global settlement previously approved by the Bankruptcy Court among Gemini, Genesis, and other creditors.

As per announcement, Gemini Earn customers will start receiving their owed assets at the beginning of the month. The company stated that 97% of the funds will be initially repaid in kind, meaning customers will receive the same type of cryptocurrency they originally deposited, such as Bitcoin, instead of its U.S. dollar equivalent.

Top US Rapper 50 Cent has seen a major exploit of..

Bitcoin's blockchain bandwidth usage has surged past 90% following the recent..

ads-image ads-image