The New York State Department of Financial Services (NYDFS) announced today (29th) that it has reached a settlement with Gemini (Gemini Trust Company, LLC), a New York-based cryptocurrency exchange.
Gemini has announced that it will return at least $1.1 billion to Gemini Earn program participants and donate $40 million to the Genesis bankruptcy case to ensure customer interests. In addition, the company will pay a $37 million fine to make up for major compliance lapses.
Gemini reaches settlement with Genesis: 100% of cryptocurrency will be returned
Gemini exchange announced today that it has reached a preliminary settlement agreement with bankrupt crypto lender Genesis and other creditors in the Genesis bankruptcy case. The news was released by the Gemini exchange, co-founded by the Winklevoss twin brothers Cameron and Tyler Winklevoss.
If the bankruptcy court approves Genesis’ bankruptcy plan, all Earn users will receive a 100% physical return of their digital assets. This means that you will receive the full appreciation of your digital assets since you loaned them to the Earn program. If the plan is approved, we will return over $1.8 billion in value (based on today's prices), $700 million more than when Genesis ceases withdrawals on November 16, 2022.
Gemini is expected to return $1.8 billion worth of cryptocurrency
It is understood that Gemini launched the Gemini Earn program in February 2021, allowing Gemini customers to lend cryptocurrency to Genesis in order to earn annual returns The interest rate is 7.4% interest. However, in November 2022, the domino effect of Three Arrows Capital and FTX triggered a liquidity crisis and suspended withdrawals. Genesis filed for bankruptcy and reorganization in January 2023, causing more than 200,000 Gemini Earn customers to suffer heavy losses. .
Gemini, as the largest creditor in the Genesis bankruptcy case, also fell out with Genesis and Genesis’ parent company Digital Currency Group (DCG) over the matter, and even sued DCG and the group’s CEO Barry Silbert for fraud in August last year. . In October last year, Gemini, Genesis and DCG were sued by the New York Attorney General's Office, accusing them of defrauding more than 230,000 investors, involving nearly $1.1 billion.
According to Gemini: “If the Genesis bankruptcy plan is approved, Earn users are expected to receive approximately 97% of their physical assets in approximately two months and the remainder within the next 12 months. Asset balance." The company added that the required bankruptcy court proceedings may take up to two months to complete and that they will keep Earn users informed of the situation during the process.
However, it should be noted that there are still uncertainties whether Genesis’ bankruptcy plan can be approved by the court, because the parent company DCG only expressed objections to the repayment plan to the court at the beginning of this month. DCG insisted that Genesis provide customers and creditors with The amount repaid should not exceed the value of the crypto assets in January 2023 when Genesis files for bankruptcy.
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