“Gemini Earn Users Take a Step Closer to Recovery with Agreement Announced Today”

Gemini Earn users are one step closer to getting their money back with an agreement announced today between US cryptocurrency exchange Gemini, Genesis Global Capital, LLC (Genesis) and Digital Currency Group

Gemini co-founder Cameron Winklevoss announced the agreement on Twitter.

“Today @Gemini reached an agreement in principle with Genesis Global Capital, LLC (Genesis), @DCGco and other creditors on a plan that will provide a path for Earn users to recover their assets,” Winklevoss tweeted. “This agreement was announced today in the bankruptcy court.”

Gemini will contribute up to $100 million more for Earn users, according to a press release sent to decryptThe terms of the agreement with DCG include the sale of Genesis Global Trading.

In addition, DCG will exchange its existing $1.1 billion promissory note due 2032 for convertible preferred stock and its existing loans maturing in 2023 in two tranches payable to creditors for an aggregate value refinance of approximately $500 million.

Gemini and Genesis were embroiled in a public battle over the Gemini Earn scheme, which allowed users to deposit their cryptocurrencies and earn returns ranging from 0.45% to 8% interest, similar to a bank account. Genesis was the primary partner for the service.

Genesis halted withdrawals in November 2022, leading to users and Winklevoss threatening legal action against the company and DCG founder Barry Silbert, and demanding that Genesis offer a plan to repay the $900 million loan that Gemini to the now bankrupt Genesis Global.

On Jan. 19, the crypto brokerage firm filed for Chapter 11 bankruptcy, joining a growing list of companies that have collapsed since the spring of 2022. At the time of filing, the company cited the collapse of Three Arrow Capital and FTX as events leading up to the company’s filing for bankruptcy.

Federal regulators in the United States then opened an investigation into the Gemini Earn program, with the SEC charging Gemini with violating securities laws.

Winklevoss described today’s agreement as a critical step toward substantial asset recovery for all Genesis creditors.

“I am grateful to the talented team at Genesis for their continued dedication and dedication to customer service, and I look forward to working together to build Genesis for the future,” said Derar Islam, interim CEO of Genesis, in the press release. “I would also like to express my deep appreciation to all of our customers for their continued patience and loyalty as we work towards a resolution to our lending business.”

Winklevoss said that while there was still work to be done, he was confident a framework was in place to move forward.

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Source: decrypt.co