- Crypto exchange Gemini announced it will return $2.18 billion to users of the Earn program, which it paused withdrawals for in November 2022.
- The fund distribution represents a 97% recovery for users since Gemini froze withdrawals from its Earn program 18 months ago.
- The move follows a $2 billion settlement from the New York attorney general with Genesis, Gemini’s lending partner, intended to make defrauded crypto investors whole again.
Crypto exchange Gemini has announced it will return $2.18 billion to users of its Earn program, which froze withdrawals in November 2022.
Background on Gemini’s Earn Program
Launched in 2021, Gemini’s Earn program enabled customers to earn high yields on their crypto assets by lending them to institutional borrowers through Genesis Global Capital. Gemini acted as an intermediary, pooling customer assets and lending them out through Genesis.
Genesis Froze Withdrawals in November 2022
In November 2022, Genesis Global Capital paused new loan originations and redemptions from its lending program. This forced Gemini to halt withdrawals from Earn, leaving customers unable to access their funds.
$2.2 Billion Settlement and Repayment Plan
Gemini has now reached a $2 billion settlement with Genesis through the bankruptcy court. This settlement will enable Gemini to return 100% of assets owed to Earn users.
Initial distributions of approximately 97% of assets owed will be immediately available in customer accounts. The remaining 3% will be repaid after final bankruptcy proceedings conclude.
Impact on Gemini Customers
The repayment means Gemini customers will receive back the full value of crypto assets they deposited into Earn, including any appreciation in value since depositing.
For example, a customer who deposited 1 bitcoin into Earn will now receive 1 bitcoin back, regardless of bitcoin‘s increased market price.
Response from New York Attorney General
The settlement follows action from New York Attorney General Letitia James, who recently announced a separate $2 billion settlement with Genesis to repay defrauded crypto investors.
Her settlement aims to make investors whole after the collapse of various crypto lending platforms in 2022.
Conclusion
The $2.2 billion settlement allows Gemini to begin fully repaying customers of its now-defunct Earn program. It provides relief to users who have waited over 18 months to access their locked crypto funds.
