Gemini Returns $2.18B to its Earn Program Users

May 29, 2024

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Gemini, the cryptocurrency exchange founded by the Winklevoss twins, has initiated the process of returning $2.18 billion to its Earn program users after an 18-month pause on withdrawals. Interestingly, this is considered a significant development for the cryptocurrency community, particularly for creditors.

Gemini Earn’s Reimbursement Strategy

According to a post on X, the $2.18 billion represents 97% of the assets owed to users, 232% recovery from when Genesis halted withdrawals. The company mentioned that the funds are repaid in kind, meaning customers will receive the same cryptocurrency they originally deposited, such as Bitcoin (BTC), instead of its U.S. dollar equivalent.

If someone lends one BTC in the Earn program, they will get one Bitcoin back. Additionally, the user will receive all the appreciation of their assets since they lent them into the Earn program.

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The effort to make amends underscores Gemini’s dedication to resolving the issues and rebuilding trust with its user community. Nevertheless, the exchange recognizes that this marks only the initial phase of a substantial endeavor to rebuild its reputation.

Gemini and Genesis at Loggerhead

The partnership between Gemini and Genesis started with Gemini serving as the primary partner for Gemini Earn.

The troubles between both organizations started in November 2022 when Genesis revealed that it was momentarily limiting customer lending withdrawals. This was after the company lost about $175 million to the defunct cryptocurrency exchange FTX after it failed. As a result, $900 million belonging to Gemini Earn users was frozen in Genesis.

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Recall that Gemini’s co-founder Cameron Winklevoss, stated that the firm had planned to sue Digital Capital Group (DCG) and its CEO, Barry Silbert for the monies owed to Gemini clients. However, Cameron added that the firm would back out of a future lawsuit if DCG and Silbert offered a reasonable settlement to the consumers of Gemini whose cash is still locked up in the Earn program.

Earn Program has Ended

Users of Earn have been subject to withdrawal restrictions since mid-November 2022 due to Genesis filing for bankruptcy after being sued by the Securities and Exchange Commission (SEC). Gemini responded by submitting a thorough claim to recover nearly $1.1 billion in assets for 232,000 Earn members.

Winklevoss stated in early 2023 that Gemini had finally ended its Earn program. Meanwhile, a founding partner of JFB Legal, who represents the crypto exchange, Jack Baughman, said in a tweet that the SEC’s litigation makes it more challenging to recover assets from the Genesis bankruptcy so to make Earn users whole.