New York, NY, Tuesday, March 5, 2024 – The Winklevoss brothers’ cryptocurrency exchange, Gemini, will return approximately $1.1 billion to customers who participated in its now-defunct Earn program.1
This announcement comes after a settlement agreement was reached with the New York State Department of Financial Services (DFS) on February 28, 2024. Gemini also announced the settlement agreement in principle with Genesis Global Capital and other creditors in the Genesis bankruptcy on February 28, 2024.
Subject to court approval, this agreement aims to return 100% of digital assets held in Gemini’s Earn program back to users.
Gemini’s Legal Statement Statement is found here.
The Earn program allowed users to lend their cryptocurrency holdings to Gemini in exchange for interest. However, the program faced disruptions in November 2022 due to liquidity issues at Genesis, a crypto lending firm partnered with Gemini. These issues prevented customers from withdrawing their funds from the Earn program.
The DFS investigation determined that Gemini failed to conduct adequate due diligence on Genesis before partnering with them. As part of the settlement, Gemini will pay a $37 million fine to the DFS and contribute $40 million to the ongoing Genesis bankruptcy proceedings.
According to Gemini, customers can expect to receive approximately 97% of their assets back within two months, with the remaining balance following within a year. The company will contact customers directly with further details about the repayment process.
Accordingly, “Earn Program” participants will receive all their digital assets back in kind, including any appreciation since their initial investment, Gemini said in the press release.2
It also said that
“If you had lent one bitcoin in the Earn program, you will receive one bitcoin back. And it means that you will receive all appreciation of your assets since you lent them into the Earn program. If approved, we will be returning over $1.8 billion in value (at today’s prices) — $700 million more than when Genesis halted withdrawals on November 16, 2022.3
The announcement said that Gemini would contribute $40 million to facilitate user recovery efforts.
- https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202402282[↩]
- https://www.gemini.com/earn[↩]
- https://www.gemini.com/blog/announcing-the-successful-resolution-of-earn[↩]
