After crypto lender Genesis got into trouble due to the FTX fiasco at the end of 2022, crypto exchange Gemini also got into trouble. This issue persisted throughout 2023, but the issue has now been resolved. Customers will receive all of their money back, and Genesis will also pay a hefty fine to the US government.
Gemini in trouble over FTX, Genesis
FTX has been a huge cornerstone of the crypto industry. The bankruptcy set off a chain reaction of new problems that ultimately hit companies like Gemini hard. Gemini had deposited money into Genesis for a modest return, which Gemini offered to customers of its staking service, Gemini Earn.
When Genesis also went bankrupt, Gemini became embroiled in the legal battle surrounding the bankruptcy process. There have been long negotiations over refunds to customers of various companies, including Gemini.
The New York Attorney General then filed charges against Gemini, claiming that Gemini was well aware of the problems at Genesis.
Gemini customers get “all their money” back
On Wednesday, Gemini announced that the negotiation process had finally concluded. Customers will receive all of their money back, which amounts to $1.8 billion. That’s $700 million more than the amount Genesis froze at the end of 2022 due to the massive action Bank run on FTX and on Genesis itself. This is because the prices of many cryptocurrencies have risen hugely recently, allowing Genesis to return more in dollars.
Earn Update: Today we are pleased to announce that we have finally reached an agreement in principle with Genesis and other creditors in the Genesis bankruptcy, which, if approved by the bankruptcy court, will result in all Earn users receiving 100% of their digital assets get back in…
— GeminiTrustCo (@GeminiTrustCo) February 28, 2024
Customers will receive 97% of their money back within the next two months. The remaining 3% will follow in the next 12 months. There is one caveat; Genesis is 100% about it Value of the assets back to Gemini, not necessarily 100% of the assets themselves. Whether a random customer gets all the coins back depends on exactly what he or she owned at the time.
Gemini also emphasizes that a settlement has been reached in the lawsuit against the New York State Attorney General’s Office.
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