Defunct cryptocurrency lender Genesis has distributed $2.18 billion worth of cryptocurrencies to 232,000 users enrolled in Gemini Earn, an interest-only lending program. The distribution came after a bankruptcy judge in New York approved the plan under Chapter 11 last week.
Gemini said in a post on X that almost all (97%) of the digital assets owed under the Gemini Earn program as part of the initial payout are now available in users’ accounts. This comes 18 months after the program was suspended in November 2022.
The amount returned to Earn users is greater than initially expected. In February, Gemini and Genesis reached an agreement to transfer $1.8 billion to users. The distribution was to begin within two months, but this was subject to court approval.
Gemini offered an optional program called Earn, under which customers could lend their cryptocurrency holdings to the company in exchange for interest. Launched in early 2021 with Genesis, the program provided a return on deposits of 7.4%. However, Gemini was forced to close Earn in January 2023 after Genesis failed to repay more than $900 million in assets owed to Gemini.
According to the post, all Earn users will receive 100% of their digital assets in return.
“If you borrowed one bitcoin in the Earn program, you will receive one bitcoin back. This means that you will receive a full evaluation of your assets since you borrowed them through the Earn program,” Gemini said.
Although most of the funds have been returned, users can expect to receive the remaining amount within the next year.
Bitcoin Trust Sale Gemini funds earn repayments after Genesis insolvency
Returning money to Gemini Earn users was not an easy process. Gemini and Genesis significantly disagreed on how to handle the return of assets.
As part of a plan to repay users, Genesis obtained court approval in February to sell its holdings in a bitcoin investment trust (Grayscale Bitcoin Trust). The sale involved 35 million shares worth more than $1.3 billion.
In November 2022, Genesis defaulted on loans worth about $1 billion to Gemini customers under the Earn program. This default led the company to declare bankruptcy just two months later.
