On Wednesday, crypto exchange Gemini announced that it had agreed with the New York State Department Of Financial Services (NYDFS) to return over $1 billion to the Earn Program Customers.

On February 28, Gemini Trust Company, founded by the Winklevoss twins in 2014, announced it reached a settlement in principle with Genesis and other creditors in the company’s bankruptcy process.

Earn Update: Today, we are pleased to announce that we have finally reached a settlement in principle with Genesis and other creditors in the Genesis Bankruptcy that will, if approved by the Bankruptcy Court, result in all Earn users receiving 100% of their digital assets back in…

— GeminiTrustCo (@GeminiTrustCo) February 28, 2024

The settlement will result in the Earn Program customers “receiving 100% of their digital assets back in kind.” The announcement further explains that, if approved by the Bankruptcy Court, users can expect to receive their assets on a 1:1 basis:

If you had lent one bitcoin in the Earn program, you will receive one bitcoin back. And it means that you will receive any and all appreciation of your assets since you lent them into the Earn program.

According to the crypto exchange, it will be returning over $1.8 billion in assets valued at today’s prices. This represents $700 million more than the value of the assets when Genesis halted withdrawals almost two years ago.

If the settlement is approved, users can expect to receive approximately 97% of their assets in a 2-month timeframe. The remaining 3% can be expected within 12 months after the approval.

Gemini clarified that the required Bankruptcy Court process could take up to two months to be completed. Additionally, it stated that the settlement, in principle, is subject to definitive documentation.

Gemini introduced the Earn Program with Genesis Global Capital (GGC). Launched in February 2021, the partnership allowed users to earn passive income through interest payments.

These interests were generated after users loaned their digital assets to GGC through the Earn program, which the company subsequentially loaned to its counterparts.

In November 2022, customers raised the alarms after withdrawals from the program were suspended at Genesis’s request. Two months later, in January of 2023, the service was permanently terminated.

Shortly after, the US Securities and Exchange Commission (SEC) filed charges against both companies for allegedly offering unregistered securities through the Earn program.

Earlier this month, GGC reached a settlement with the SEC to end the civil lawsuit against the company. In the settlement, it agreed to pay a $21 million civil penalty, depending on the company’s fulfillment of the repayment of customers and creditors.

On Wednesday, NYDFS’s Superintendent Adrienne Harries announced that the crypto exchange will contribute $40 million to the Genesis Global Capital bankruptcy for the benefit of the Earn customers.

Additionally, Gemini will pay a $37 million fine to the NYDFS for its “significant failures” in safeguarding its customers, which “threatened the safety of the company.” The NYDFS considers that the company failed to conduct sufficient due diligence on GGC and to “maintain adequate reserves throughout the life of Earn.”

Superintendent Harries suggests that the settlement signifies a win for Earn users. Customers will regain their right to the assets they entrusted to the exchange and that it “failed to protect,” Harries said:

Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown.

Lastly, NYDFS announced that, as a part of the settlement, it reserves the right to take further legal action against Gemini if the company fails to fulfill its obligation to return at least $1.1 billion to the Earn program customers.

Similar to Notcoin - TapSwap on Solana Airdrops In 2024

origin »

172 +