News
Gemini returns $2.1 billion to crypto customers
Fallen cryptocurrency lender Twins It will reportedly begin returning billions in frozen customer funds.
The company, owned by billionaire twin brothers Cameron and Tyler Winklevoss, announced Wednesday that it will do so return $2.18 billion of its digital assets to Earn program customers, CNBC reported, citing an email to customers.
“Today we are pleased to inform you that initial Earnings distributions – approximately 97% of the digital assets owed to you by Genesis as of the suspension date (November 16, 2022) – are now available in your Gemini account,” the e- mail reads.
“This follows our previous announcement that we have reached a settlement with Genesis and other creditors in the Genesis bankruptcy, which will result in all Earn users receiving 100% of their digital assets in kind.”
The message adds: “This means that if you lent a bitcoin in the Earn program, you will receive a bitcoin back. And it means you’ll receive any increase in the value of your assets since you lent them to the Earn program.
According to CNBC, the $2.18 figure represents a 232% recovery for users since the company suspended withdrawals for customers of its Earn Money program 18 months ago.
Introduced in 2021, Earn allows customers to enjoy returns on their cryptocurrencies by storing them with Gemini, which then lends the cryptocurrency to institutional borrowers through lending partner Genesis Global Capital.
Genesis paused again loan disbursements and repayments in November 2022, which forced Gemini to stop withdrawals from its Earn program. Genesis filed for bankruptcy protection last year, with the state of New York recently announcing a $2 billion deal with Genesis to repay defrauded investors.
The news comes as the cryptocurrency sector is at roughly a level crossroadsas PYMNTS wrote earlier this month on two news events: the incarceration of one-time cryptocurrency wunderkind Sam Bankman-Fried and the passage of the law Financial innovation and technology for the 21st century (FIT21) Act, the first step towards creating a comprehensive cryptographic framework.
The bill, which faces an uncertain future in the Senate, “establishes a process to permit secondary market trading of digital commodities if they were initially offered as part of an investment contract.”
It also “imposes comprehensive customer disclosure, asset protection and operational requirements on all entities required to register with the CFTC and/or the SEC.”
However, as Karen Webster, CEO of PYMNTS, wrote years ago, “bitcoin has been an interesting, even fascinating innovation, but not salvation of our global financial system – not even close.”
“With political momentum seemingly behind the industry, now will be the time for the cryptocurrency sector to prove its worth — or risk revealing to the world that the emperor was really naked this whole time,” PYMNTs wrote.