The reimbursement will be made in cryptocurrencies, which have doubled in value since the Genesis bankruptcy

Genesis submits a plan to the court to refund 100% of funds to Gemini Earn program customers

20.03.2024 - 13:35

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3 min

What’s new? Bankrupt crypto broker Genesis has submitted for court approval a reimbursement plan that will return 100% of their assets to customers of the Earn income program, launched in conjunction with crypto exchange Gemini. According to the plan, the payouts will be made in cryptocurrencies that have doubled in value since Genesis stopped making payments under the Earn program.

Press release

What else is known? If the proposal is approved by the court following a hearing on April 16, Earn users will collectively receive cryptocurrencies worth $2 billion at current prices. At the time of Ear’s closing, their claims were valued at $1,1 billion.

97% of the amount is expected to be reimbursed within weeks of court approval. The remaining funds will be distributed as they are received from Genesis’ parent company, Digital Currency Group (DGC), headed by Barry Silbert. DCG also includes Grayscale, an investment firm that manages the largest spot bitcoin exchange-traded fund (ETF) by assets under management.

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Gemini said it will contribute $50 million of the total amount of funds to be returned to users and is allowed to accelerate the shipment of assets regardless of the outcome of Genesis’ bankruptcy plan.

The settlement agreement also resolves disputes between Genesis and Gemini that may have affected the distribution of funds. For example, Genesis was previously sued by Gemini for $1,6 billion, and in return demanded $686 million from Gemini.

Launched in December 2020, Earn allowed Gemini customers to lend their cryptocurrencies to Genesis at interest. After the broker went bankrupt last January, more than 100 000 users were unable to receive their assets and interest.

Also last January, the US Securities and Exchange Commission (SEC) accused Genesis and Gemini of unregistered offer and sale of securities to retail investors through the Earn program. In February of this year, Genesis settled the SEC’s claims: it will pay a $21 million fine after it settles with customers.

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