Winklevoss-Owned Gemini Returns $2.18B to Users After Genesis Bankruptcy

Gemini is distributing $2.18 billion in digital assets to 232,000 Gemini Earn users following Genesis's bankruptcy.

The figure represents a 242% return on assets locked up since January 2023. Those who loaned 1 Bitcoin (BTC) to Genesis will receive 1 BTC back, benefiting from BTC's recent price surge.

Gemini customers will receive 97% of the repayment immediately and the remainder within one year, the company said.

"We are thrilled to have been able to achieve this recovery for our customers," Gemini co-founder Cameron Winklevoss said in a statement. "We recognize the hardship caused by this lengthy process and appreciate our customers' continued support and patience throughout."

Gemini, which was founded by Cameron and Tyler Winklevoss in 2014, had a lawsuit filed against it by the New York Attorney General (NYAG) for defrauding investors last October.

“These cryptocurrency companies lied to investors and tried to hide more than a billion dollars in losses, and it was middle-class investors who suffered as a result,” New York Attorney General Letitia James said.

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In November 2022, Genesis Global sued Gemini Trust to recover funds withdrawn by customers in the post-FTX bank run that led to Genesis's bankruptcy.

Genesis claimed up to 230,000 users under the "Earn investing program" withdrew $689 million from its platform in 90 days before it filed for bankruptcy.

The crypto lender borrowed assets from Earn customers and re-invested the funds to pay interest to customers. Gemini served as the custodian that processed deposits and withdrawals, earning a cut from payments by Genesis to Earn users.

When Genesis froze customer accounts in November 2022, the total value of Gemini Earn assets was $940 million.

Genesis has since been able to return customers' crypto instead of liquidating a limited pool of assets and repaying them in cash.

Earlier this month, Genesis Global was approved to return $3 billion in cash and crypto to its customers.

Crypto Lender Genesis Approved to Return $3Bn to Customers

Bankruptcy Judge Sean Lane has approved Genesis Global’s Chapter 11 liquidation plan

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"We didn’t cap their claims at the petition date value," Genesis attorney Sean O'Neal said on Wednesday. "Now we need to focus on making distributions to Genesis's remaining creditors."