Crypto payouts for Gemini Earn creditors may be reduced by up to 70%
Gemini Trust, a cryptocurrency exchange, has proposed a reorganization plan that could lead to a substantial reduction in cryptocurrency payouts for creditors of its Gemini Earn program. In an email sent to creditors, Gemini outlined the proposed plan, which is now up for a vote. According to the plan, creditors will receive payouts based on their Earn crypto balances as of January 19, 2023, the date when Gemini’s crypto lending partner, Genesis Global Capital, filed for bankruptcy. However, the value of major cryptocurrencies like Bitcoin (BTC) and Ether (ETH) was significantly lower at that time compared to their current market prices.
This proposed plan has been met with criticism from Gemini’s customers. Many users have expressed their displeasure on the platform, calling the proposal a “spit in our faces” and an “absolute disgrace.” Some users accused Gemini of misleading its customers by assuring them that they would not face counterparty risk from their association with Genesis. Users are demanding to be paid back in full, considering anything less to be unacceptable.
The Gemini Earn program allowed users to earn interest on their cryptocurrency holdings. Before Genesis’s bankruptcy, Gemini had withdrawn hundreds of millions of dollars from the firm to support the program. Now, Gemini is seeking to recover $1.6 billion from Genesis for Earn users.
Creditors have until January 10, 2024, to cast their vote on the proposed plan. If accepted, the plan will require final approval from the bankruptcy court overseeing the case, with a decision expected on February 14, 2024.
Overall, the proposed reorganization plan by Gemini Trust could have significant implications for creditors, with potential reductions in cryptocurrency payouts, leading to a backlash from users who feel misled and cheated by the company.
