Gemini Earn Users Could Face a Refund of Only 60% on Their Cryptocurrency Investments

Crypto News- As of December 14, ETF analyst James Seyffart expressed concern, stating, ‘This could be brutal,’ and deeming it a worst-case scenario.

Even at a 100% recovery rate, which remained a possibility, the impact would still be significant based on current asset prices, he noted, highlighting that Bitcoin was valued at $20,940 and Ethereum at $1,545 at the time.

Gemini Earn Users Could Face a Refund of Only 60% on Their Cryptocurrency Investments

Gemini filed a reorganization plan in bankruptcy court on December 13, outlining the initial distribution proposal for Earn users. The disclosure statement projected that users could reclaim 61-100% of their account balances through the intricate plan, with potential additional funds from Gemini’s litigation.

Users were instructed to review the statement and cast their votes on accepting or rejecting the plan by January 10, 2024. If confirmed, an initial distribution to Earn users would follow, possibly accompanied by subsequent distributions.

Gemini warned that rejecting the plan would force the development of an alternative, causing distribution delays of several months at least.

Reactions to the proposed recovery plan were impassioned, with calls to reject it and reimburse all assets. One responder questioned, ‘Where the hell is the other 41%? What a fraud.’ Another expressed frustration, stating, ‘How can any of your customers believe a single word you say when you have deceived and lied to us for WELL over a year.’

Concerns were raised about the ambiguity of the recovery percentage, with one individual remarking, ‘Maybe 61%? Maybe 100%? I’m supposed to vote on this? How is this fair? You stole our money. Give it ALL back, every single dollar.’

Commenting on the market conditions, another noted, ‘BTC and ETH have doubled since the petition date, so 60-100% recovery is actually 30-50% recovery,’ concluding with, ‘What a joke. Good riddance. Winkelvi are finished.’

Reflecting on the past, the US Securities and Exchange Commission charged Gemini for the unregistered offering and sale of securities through its Earn program in January. The Earn program, launched in February 2021, allowed retail investors to earn interest on their crypto assets. Gemini customers alleged at the time that the exchange misled them regarding the FDIC status of their GUSD stablecoin deposits. In February, Gemini and lending company Genesis reached a $100 million agreement over the Earn program.