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Highlights
- Gemini's Earn program begins repaying users over $2 billion in cryptocurrency after over a year of halted withdrawals.
- The recovery rate for the Gemini Earn program reaches 232%, signaling a significant financial rebound.
- Cameron Winklevoss, co-founder of Gemini, expresses gratitude for customer patience during recovery.
More than a year after halting withdrawals, Gemini Earn program has begun repaying over $2 billion in cryptocurrency to its users, the company announced Wednesday. This payout, which ensures customers receive their lent crypto assets, marks a step forward following a period of financial upheaval.
Gemini Begins Funds Distribution, Recovery at 232%
Gemini, a crypto exchange owned by the Winklevoss twins, has initiated funds distribution, representing a 232% recovery rate.
“We are thrilled that we have been able to achieve this recovery for our customers,” said Cameron Winklevoss, co-founder and president of Gemini.
Winklevoss acknowledged the challenges posed by the delay and expressed gratitude for the patience shown by their clientele. Gemini launched the Earn program in 2021 and partnered with Genesis Global Capital, LLC. This partnership allowed users to earn up to 7.4% APY on their crypto loans.
Unfortunately, Genesis Global Holdco, the parent company, filed for bankruptcy protection in January 2023. This was due to the collapse of giant players in the crypto market, including 3AC and the FTX exchange, in 2022. These events led to freezing withdrawals, straining customer relations, and Gemini’s operational stability.
Tyler Winklevoss Defends Crypto Amid Legal Issues
The Earn program’s troubles extended into the legal arena, facing challenges from federal and state regulators. Last year, the Securities and Exchange Commission (SEC) filed a lawsuit claiming that the Earn program was an unregistered securities offering. Gemini and Genesis responded by seeking to dismiss the charges. Furthermore, the New York Attorney General’s Office launched a lawsuit against Gemini, Genesis Global, and Digital Currency Group (DCG) related to the lending program.
However, Gemini agreed to a settlement with the New York State Department of Financial Services, which included a $37 million fine and a commitment to return $1.1 billion to Gemini Earn customers. This agreement was critical in stabilizing the firm’s operations and restoring trust among its users. Following the announcement of this settlement, shares of Gemini Group Global Corp (GMNI) have surged by 17.50%.
Gemini has reassured its customers that the remainder of their “asset balance” will be returned within the following year. Tyler Winklevoss, Co-Founder and CEO of Gemini, emphasized that the underlying issue was not inherent to cryptocurrency but was instead tied to traditional financial fraud exacerbated by unclear regulatory frameworks.
“It’s important to note that the Genesis bankruptcy was not a crypto problem,” he stated, aiming to restore confidence in the digital asset industry.
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