Gemini Earn Clients Will Receive Only 61% of Assets Under Restructuring Plan

Gemini Earn users would recover only 61% of the value of lost assets under the worst-case scenario, according to the restructuring plan. The voting period will run until 4:00 pm EST on January 10, 2024.

Earn Update: Solicitation of the Genesis Plan of Reorganization (Plan) began today. Earn users were sent an email with specific instructions on how to vote on the Plan and a link to the Genesis Solicitation Package, including the Disclosure Statement.

The voting deadline is…

— GeminiTrustCo (@GeminiTrustCo) December 13, 2023

If the plan is approved, it will be considered by the bankruptcy court on February 14, 2024.

Users were sent voting instructions and a link to the Genesis Solicitation Package.

Under the reorganisation plan, creditors will receive a payout in a defined ratio to their Earn balances as of January 19, 2023—the date on which Gemini’s partner, the lending platform Genesis Global Capital, filed for bankruptcy.

Bloomberg analyst James Seyffart described the plan as ‘brutal’. He noted that even in a favorable scenario [100% recovery at prices as of January 19, 2023] Bitcoin and Ethereum would be valued at $20,940 and $1,545.

This could be brutal. Granted seems to be worst case scenario but Gemini Earn users could be getting potentially just 61% of the value of their crypto from Jan 19, 2023. WOOF.

Even at 100% it stings based on current prices. Thats 61%-100% of:

Bitcoin $20,940
Ethereum $1,545 https://t.co/A6u28U3dsi pic.twitter.com/5SKZnlRjr9

— James Seyffart (@JSeyff) December 14, 2023

In the worst case (payouts at 61%), the calculation would be based on $12,773 per unit of the first cryptocurrency.

Many users voiced their opposition to the proposed terms, urging a vote against the restructuring plan.

I vote no because this is a spit in our faces. Absolute disgrace

— Andrew Aleid (@AndrewAleid) December 13, 2023

‘I vote against, because this is a spit in our faces. An absolute disgrace’, — said by one of the clients.

Maybe 61%? Maybe 100%? I’m supposed to vote on this? How is this far? You stole our money. Give it ALL back, every single dollar.

— Leslie (@mrsdrianmalcolm) December 14, 2023

‘You stole our money. Return all, every single dollar’, — wrote another.

Gemini Earn clients’ claims against Genesis were valued at $900 million.

In May DCG defaulted on a payment of $630 million as part of compensation to Gemini Earn users.

In July, the Winklevoss twins’ exchange filed a lawsuit against the company and its founder Barry Silbert, calling the latter ‘the architect and instigator of fraud’. Later in Digital Currency Group they asked to dismiss the suit.

In September, DCG proposed a new restructuring option for Genesis Global Capital. The document offers unsecured creditors a base recovery of 70–90% of the amount of the claims.

The agreement, awaiting creditor approval, is aimed at revising the terms of the $630 million loan between Genesis and DCG.

It had been anticipated that Gemini Earn users with collateral totalling about $607 million could potentially receive up to 110% of total claims.