In a significant development for customers affected by Gemini’s paused crypto lending program, the crypto exchange has announced the return of $2.18 billion of digital assets to customers.
Gemini, owned by tech billionaire twins Cameron and Tyler Winklevoss, temporarily halted withdrawals from its Earn program in November 2022, leaving users waiting for their funds.
Full Asset Return For Customers Of Defunct Earn Program
According to a CNBC report, in an email sent to customers on Wednesday, Gemini informed them that approximately 97% of the digital assets owed to them at the time of the suspension are now available in their Gemini accounts.
The company reached a settlement with Genesis, its lending partner, and other creditors involved in the Genesis Bankruptcy, ensuring that all users fully receive their digital assets. The email adds:
This means that if you lent one Bitcoin in the Earn program, you will receive one Bitcoin back. And it means that you will receive any and all increase in the value of your assets since you lent them into the Earn program.
With this distribution, users will experience a significant recovery of 232% from the initial suspension of the Earn program, providing relief to those affected by the long wait for access to their funds.
Gemini Resolves Crypto Lending Program Crisis
Launched in 2021, the Earn program allowed Gemini customers to earn high cryptocurrency yields by participating in the exchange’s lending scheme. Gemini, in turn, lent customers’ crypto holdings to institutional borrowers through Genesis Global Capital, its trusted lending partner.
Genesis Global Capital’s pause in new loan originations and redemptions in November 2022 prompted Gemini to halt withdrawals from its Earn program. Subsequently, Genesis filed for Chapter 11 bankruptcy protection in January, leading to a prolonged period of uncertainty for affected customers.
However, recent developments have brought positive news. Last week, the New York Attorney General, Letitia James, announced a $2 billion settlement with Genesis, ensuring repayment to defrauded investors.
Genesis Global Capital has also received court approval to initiate its $3 billion repayment plan to creditors, including participants in the Gemini exchange’s Earn program. Notably, Digital Currency Group (DCG), the parent company of Genesis, will not be recovering any value from the bankruptcy payout plan.
Gemini’s decision to return the $2.18 billion of digital assets to its customers marks a significant step towards resolving the aftermath of the paused Earn program.
At the time of writing, Bitcoin, the largest cryptocurrency in the market, holds a value of $67,750. Over the past 24 hours, it has displayed sideways price action, indicating minimal fluctuations compared to Tuesday’s closing price.
Featured image from Shutterstock, chart from TradingView.com