-
Gemini
Earn
customers
will
receive
100%
of
their
assets
–
possibly
more
than
$1.1
billion
–
when
Genesis
Global
Capital,
Gemini’s
former
partner
on
Earn,
wraps
up
its
bankruptcy
case. -
Genesis
filed
for
bankruptcy
in
January
2023.
Gemini
Earn
customers
will
receive
100%
of
their
locked-up
holdings
–
potentially
north
of
$1.1
billion
–
from
the
now-defunct
program
after
a
settlement
with
the
New
York
Department
of
Financial
Services,
NYDFS
announced
Wednesday
afternoon.
As
part
of
the
settlement,
Gemini
will
give
Genesis
–
which
provided
services
that
helped
Earn
function
–
$40
million
for
its
bankruptcy
proceedings,
which
are
ongoing,
and
pay
$37
million
to
NYDFS.
And,
according
to
a
press
release,
Gemini
“has
committed”
to
having
$1.1
billion
for
its
Earn
customers
by
the
time
Genesis
wraps
up
its
bankruptcy
proceedings.
In
a
tweet,
Gemini
said
this
would
amount
to
100%
of
customers’
assets,
received
in-kind,
assuming
a
bankruptcy
court
signs
off
on
the
agreement.
“Gemini
commits
to
working
through
the
bankruptcy
process
to
ensure
that
Earn
Customers
make
a
full
recovery
of
their
virtual
currency,”
NYDFS
said.
Earn
was
a
product
that
let
Gemini
customers
earn
interest
on
cryptocurrency
investments.
Genesis
supplied
backend
services
for
the
program.
The
regulator
alleged
that
Gemini
did
not
conduct
due
diligence
on
Genesis
Global
Capital,
which
was
unregulated
and
later
sued
by
the
New
York
Attorney
General’s
office
for
fraud
(Genesis
Global
Trading,
another
wing
of
the
Genesis
entity,
previously
had
a
NYDFS
BitLicense,
but
was
not
part
of
the
Earn
program).
Genesis
filed
for
bankruptcy
in
January
2023,
naming
Gemini
as
one
of
its
50
biggest
creditors.
Genesis
had
previously
suspended
customer
withdrawals,
which
affected
Gemini
Earn
customers.
On
Wednesday,
NYDFS
noted
that
Genesis
defaulted
on
about
$1
billion
in
loans
from
Earn
customers,
harming
about
200,000
different
customers.
“In
addition
to
Gemini’s
failures
related
to
Earn,
the
Department’s
investigation
revealed
that
Gemini
engaged
in
unsafe
and
unsound
practices
that
ultimately
threatened
the
financial
health
of
the
company,”
the
press
release
said.
“Gemini
Liquidity
LLC,
an
unregulated
affiliate,
collected
hundreds
of
millions
of
dollars
in
fees
from
Gemini
customers
that
otherwise
could
have
gone
to
Gemini,
substantially
weakening
Gemini’s
financial
condition.”
NYDFS
reserved
the
right
to
sue
Gemini
if
the
company
does
not
pay
back
the
$1.1
billion
“after
the
resolution
of
the
[Genesis]
bankruptcy.”
UPDATE
(Feb.
29,
2024,
22:10
UTC):
Clarifies
details
of
what
Earn
customers
will
receive.
