With a deal announced today by US cryptocurrency exchange Gemini, Genesis Global Capital, LLC (Genesis), and Digital Currency Group, Gemini Earn users are one step closer to getting their money back.
The agreement was revealed on Twitter by Cameron Winklevoss, a co-founder of Gemini.
According to a press statement, the parameters of the arrangement with DCG include the sale of Genesis Global Trading. Gemini will provide up to $100 million extra for Earn members.
Additionally, DCG will refinance its current 2023 term loans in two tranches payable to creditors for a combined total of around $500 million and swap its existing $1.1 billion note due in 2032 for convertible preferred shares.
The Gemini reward program, which enabled users to deposit their cryptocurrencies and get returns of between 0.45% and 8% percent, akin to a bank account, has been the subject of a public dispute between Gemini and Genesis. The service’s main partner was Genesis.
Users and Winklevoss threatened legal action against Genesis and DCG founder Barry Silbert when the business stopped allowing withdrawals in November 2022. They demanded that Genesis present a plan for repaying the $900 million debt Gemini paid to the now-bankrupt Genesis Global.
The crypto trading firm filed for chapter 11 bankruptcy on January 19, adding its name to an expanding list of businesses that have failed since the spring of 2022. When the firm filed for bankruptcy, it cited the failure of FTX and Three Arrow Capital as the reasons for doing so.
The Gemini Earn program was afterward under investigation by American federal regulators, and the SEC accused Gemini of breaking securities laws.
Winklevoss referred to the arrangement reached today as a crucial step toward a significant asset recovery for all Genesis creditors.
“I am grateful to the talented team at Genesis for their ongoing dedication and commitment to client service and excited about working together to build Genesis for the future. I also want to express my deep appreciation to all of our clients for their continued patience and loyalty as we work through a resolution for our lending business,” Derar Islim, Genesis’ Interim CEO, said in the release.
Even while there is still work to be done, Winklevoss said he is convinced there is a foundation in place to go ahead on.