Users of Gemini Earn are finally a step closer to getting their money back, as an agreement was announced between Digital Currency Group (DCG), Genesis Global Capital, and the US-based crypto exchange Gemini.
The announcement of the agreement came from the co-founder of Gemini, Cameron Winklevoss, on Twitter.
Winklevoss said that Gemini had reached an agreement with Genesis Global Capital, DCG, and other creditors on a plan that would help Earn users in recovering their assets.
He stated that the agreement had been announced in Bankruptcy Court. The terms of the agreement show that an additional $100 million will be contributed by Gemini for the Earn users.
In addition, it also involves the sale of Genesis Global Trading by DCG. The latter will also exchange its existing note worth $1.1 billion, which is due in 2023, for convertible preferred stock.
Apart from that, the Digital Currency Group will also be required to refinance its existing loans of 2023 in two tranches, which will be paid to creditors. These are valued at a total of $500 million.
Genesis and Gemini had been battling publicly over the Gemini Earn program, which enabled users to deposit their digital assets and earn interest of 0.45% to 8%, just like a bank account.
Genesis had been the service’s primary partner, but in November 2022, it hit a pause on withdrawals. This prompted Winklevoss and users to threaten legal action against the firm and its founder, Barry Silbert.
They had demanded that a plan be offered by Genesis for repaying the $900 million loan that had been made to Genesis Global by Gemini.
In the midst of this spat, the crypto brokerage filed for bankruptcy on January 19th, as it joined a series of crypto firms that have collapsed since the spring of last year.
Genesis Global cited the collapse of the FTX crypto exchange and bankruptcy of Three Arrows Capital (3AC) as events that resulted in its own Chapter 11 bankruptcy.
Subsequently, the US federal prosecutors had begun investigating the Gemini Earn program and Gemini was charged with violation of securities law by the Securities and Exchange Commission (SEC).
According to Winklevoss, the agreement they have reached is a major step in recovering the assets of Gemini Earn users.
The Interim CEO at Genesis, Derar Islim praised the Genesis team for their commitment and dedication to building the company for the future.
He also expressed gratitude towards clients for their loyalty and patience while they work on a resolution for their lending business.
Winklevoss asserted that even though there is still some work to be done, they are confident that a framework has now been established for them to move on.
No other details were shared about exactly how much would be recovered on behalf of the Gemini Earn users.
The prices of crypto assets have changed significantly since the start of the year, as there has been a rally in the market.