Tuesday, July 16, 2024
Home Cryptocurrency Gemini Aarn Recovers 97% of Clients’ Lost Crypto Assets

Gemini Aarn Recovers 97% of Clients’ Lost Crypto Assets

by xyonent
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Gemini Settlement.jpg

Gemini’s bankrupt crypto lending unit managed to recover almost all of its clients’ digital assets, making it one of the most successful bankruptcy recoveries in the industry to date.

The cryptocurrency exchange, founded by billionaire entrepreneurs Cameron and Tyler Winklevoss, announced on Wednesday that Gemini Earn clients had “received $2.18 billion worth of digital assets in-kind.”

Gemini Arn’s full recovery

“This means, for example, that if you lend 1 bitcoin through the Earn program, you will get 1 bitcoin back,” Gemini says. explanation On Twitter: “That means when you lend your property to the Earn program, you get to keep any appreciation in your property’s value.”

The announcement was well received by the online cryptocurrency community, which praised the exchange’s leaders for acting responsibly after losing customer funds within Genesis Global: “Thanks to Tyler and Cameron’s steadfast determination, Gemini has filled the $50 million hole created by the DCG/Genesis losses and fully compensated all acquired users.” I have written Blockstream CEO Adam Back responded:

Genesis and Gemini collapsed in the aftermath of the collapse of FTX and Alameda Research in late 2022. Last week, Genesis received court approval for a bankruptcy plan to repay more than $3.5 billion to creditors.

One of those creditors was Gemini, which generated revenue by lending customer assets in the Earn program to Genesis.

The Genesis collapse led to a fierce back and forth of fraud allegations and litigation between Gemini, Genesis and Digital Currency Group, culminating in a $2 billion settlement with New York Attorney General Letitia James last week.

Less successful cryptocurrency bankruptcies

Gemini’s recovery stands out from that of other cryptocurrency companies that have collapsed in 2022, which have only been able to recover a fraction of their customers’ stolen assets.

At best, companies like FTX and Celsius have promised to refund 100% of their customers in cash rather than cryptocurrency, but this represents a huge opportunity cost for investors whose assets would have appreciated significantly since the respective companies’ bankruptcies.

In contrast, Gemini said the repayments were $1 billion more than at the time it froze withdrawals, representing a 232% recovery in U.S. dollar terms.

Gemini claimed that after the successful recovery, Genesis was fully responsible for the bankruptcy.

“The Genesis bankruptcy wasn’t about cryptocurrency,” the company said. “It was about good old-fashioned financial fraud compounded by regulatory uncertainty.”

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