Gemini, a prominent crypto exchange, announced that users of its Earn product have received a significant portion of their digital assets, totaling $2.18 billion. This recovery amounts to 97% of the total digital assets owed to Earn users, showcasing a remarkable turnaround since the collapse of crypto lender Genesis, which ceased withdrawals in November 2022.
The exchange clarified that the assets were returned in kind, meaning that users who lent specific digital assets to the Earn program received the same assets back. For instance, if a user had lent one Bitcoin to the Earn program, they were refunded with one Bitcoin. This resulted in a 232% recovery for Earn users, as the value of many digital assets has surged compared to two years ago.
Gemini’s founders, Cameron and Tyler Winklevoss, highlighted the significance of this recovery, hailing it as an unprecedented achievement among crypto bankruptcies. They also mentioned that a settlement in principle had been reached with Genesis and other creditors in the Genesis Bankruptcy, ensuring that all Earn users would receive 100% of their digital assets back in kind.
Contrary to misconceptions, Gemini clarified that Genesis’s bankruptcy was not a result of issues within the crypto industry. Instead, it was attributed to “old-fashioned financial fraud compounded by a lack of regulatory clarity” in the United States. As a result, Gemini reiterated its commitment to championing better regulatory measures to safeguard the industry.
Gemini declared, “We will continue to fight for clear rules and guidance for our industry that foster both innovation and consumer protection. And we will win this fight. The future is bright.” By advocating for regulatory clarity, Gemini aims to create a secure environment for users while nurturing innovation within the crypto space.
Despite the positive recovery for Earn users, industry analysts caution that in-kind distributions could trigger substantial selling pressure as creditors look to liquidate their assets. Evan Cohen, a thesis investor, remarked, “Lots of sellers [are] now ready to unload their 2-year locked-up crypto.” This heightened trading activity has the potential to impact Bitcoin and Ethereum prices significantly.
Through strategic recovery efforts and advocacy for regulatory clarity, Gemini has not only managed to salvage a majority of digital assets for Earn users but also reinforced its commitment to fostering a robust and transparent crypto ecosystem.
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