Genesis Returns $2.2B in Crypto Assets to Lending Program Participants

CryptoNews.com

2024-05-29 21:54:23

Shalini Nagarajan

Last updated:

May 30, 2024 01:54 EDT | 1 min read

Defunct crypto lender Genesis distributed $2.18b worth of crypto to 232,000 users enrolled in Gemini Earn, an interest-accruing lending program. The distribution followed a New York bankruptcy judge approving the Chapter 11 plan last week.

Gemini said in a post on X that nearly all (97%) of the digital assets that were owed from the Gemini Earn program, as part of the initial payout, are now available in users’ accounts. It comes 18 months after after the program’s suspension in Nov. 2022.

The figure being returned to Earn users is more than initially expected. In February, Gemini and Genesis reached a settlement to distribute $1.8b to users. The distribution was supposed to begin within two months, but it depended on court approval.

Gemini offered an optional program called Earn, where customers could lend their crypto holdings to the company for interest. Launched in early 2021 with Genesis, the program promised a return of 7.4% on deposits. However, Gemini was forced to shut down Earn in Jan. 2023 after Genesis failed to repay over $900m in assets owed to Gemini.

Today, Earn users received $2.18 billion of their digital assets in kind. These initial distributions represent:

• 97% of digital assets owed to Earn users
• $1 billion more than when Genesis halted withdrawals
• A 232% recovery from when Genesis halted withdrawals…

— Gemini (@Gemini) May 29, 2024

Remaining Earn Balances Coming Within 12 Months

All Earn users will receive 100% of their digital assets back in kind, according to the post.

“This means, for example, that if you had lent one Bitcoin in the Earn program, you will receive one Bitcoin back. And it means that you will receive any and all appreciation of your assets since you lent them into the Earn program,” Gemini said.

While most of the funds have been returned, users can expect to receive remaining balances within the next year.

Bitcoin Trust Sale Funds Gemini Earn Repayments After Genesis Default

Getting the money back to Gemini Earn users wasn’t a smooth process. Gemini and Genesis disagreed significantly on how to handle the asset return.

As part of its plan to repay users, Genesis got approval from a court in February to sell shares it held in a Bitcoin investment trust (Grayscale Bitcoin Trust). The sale involved 35m shares worth over $1.3b.

In Nov. 2022, Genesis failed to repay about $1b in loans that Gemini customers had provided through the Earn program. This default led the firm to file for bankruptcy just two months later.

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