Gemini, the popular crypto exchange, recently announced that users of its Earn product have successfully received $2.18 billion of their digital assets. This marks a significant milestone for the users, as it represents 97% of the total digital assets that were owed to them. The recovery comes after the collapse of crypto lender Genesis, which caused withdrawals to halt back in November 2022. It is noteworthy that the assets were returned in kind, meaning that users received the same assets they initially lent to the Earn program.
Cameron and Tyler Winklevoss, the founders of Gemini, expressed their satisfaction with the recovery process. They highlighted the unprecedented nature of this recovery, especially in the realm of crypto bankruptcies. The Winklevoss twins stated, “This represents an unprecedented recovery among crypto bankruptcies, as well as bankruptcies in general, and follows our previous announcement that we reached a settlement in principle with Genesis and other creditors in the Genesis Bankruptcy, which will result in all Earn users receiving 100% of their digital assets back in kind.”
Gemini reiterated that Genesis’s bankruptcy was not a result of inherent issues within the crypto industry. Instead, it was attributed to “old-fashioned financial fraud compounded by a lack of regulatory clarity” in the US. As a response, the company has emphasized its dedication to advocating for better regulatory measures to support the industry. The statement from Gemini read, “We will continue to fight for clear rules and guidance for our industry that foster both innovation and consumer protection. And we will win this fight. The future is bright.”
It is worth noting that industry analysts have raised concerns about the in-kind distributions to Earn users. There is a possibility that these distributions could lead to substantial selling pressure as creditors decide to liquidate their assets. Evan Cohen, a thesis investor, pointed out, “Lots of sellers [are] now ready to unload their 2-year locked-up crypto.” This increased trading activity has the potential to affect the prices of major digital assets like Bitcoin and Ethereum in the market.
Gemini’s successful distribution of digital assets to its Earn users showcases a remarkable recovery process. The commitment to advocating for regulatory clarity and the proactive approach towards supporting the crypto industry highlight the company’s dedication to innovation and consumer protection. While there may be potential challenges ahead due to the distributions, the overall outlook remains positive for both Gemini and its users.
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