Gemini to return USD2.2B in digital assets to customers
Date
5/30/2024 3:37:48 AM
(MENAFN) Gemini, a prominent cryptocurrency exchange company, has announced a significant move to return USD2.2 billion worth of digital assets to its customers. These funds were previously frozen in the company's now-defunct lending program.
According to Gemini's statement, approximately 97 percent of the owed digital assets, initially distributed as part of the Earn program, will now be accessible to users through their Gemini accounts. These distributions will be provided in kind, ensuring that customers receive the equivalent amount of digital assets they initially lent. Furthermore, customers will benefit from any increase in the value of these assets since they were lent into the Earn program.
However, users can expect to receive the remaining balance of their assets over the next 12 months, as the company finalizes the process of returning funds. The Earn program, launched in early 2021, allowed Gemini customers to lend their funds to the company, promising a 7.4 percent return on deposits. Partnering with crypto brokerage firm Genesis, the program aimed to offer customers an opportunity to earn passive income on their crypto holdings.
Gemini's recent actions follow a settlement reached with the New York Department of Financial Services in February. The settlement mandated the return of at least USD1.1 billion to customers affected by the program's suspension. This decision came in the wake of Genesis Global Capital's bankruptcy proceedings, filed for Chapter 11 in January 2023, after defaulting on approximately USD1 billion worth of loans made by Gemini's Earn customers.
Adrienne A. Harris, superintendent of the agency, criticized Gemini for failing to conduct due diligence on Genesis, which was later accused of massive fraud. The collapse of Genesis resulted in Earn customers being unable to access their assets, highlighting the risks associated with unregulated third parties in the cryptocurrency ecosystem.
Founded in 2014 by American investor brothers Tyler and Cameron Winklevoss, Gemini continues to navigate challenges within the cryptocurrency industry while striving to maintain trust and transparency with its customers.
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