A ray of hope has emerged for over 230,000 retail creditors of the Gemini Earn program, as a proposed remuneration deal, scheduled for voting later this year could see them regain almost 100% of their claims. This Earn program which was notably associated with Gemini crypto exchange was underpinned by Genesis’s financial infrastructure, which now (and ironically) forms the crux of the issue – the unexpected halt of withdrawals and subsequently, Genesis filing for bankruptcy.
According to Wednesday’s filing, assuming diverse Genesis creditor groups endorse the proposed deal, Gemini Earn users could recuperate between “95-110% of their claims”. A sudden juxtaposition emerges here, since earlier indications by the attorneys for Genesis and DCG pointed towards a maximum recoverable amount of only 90% for unsecured creditors.
The scenario was amplified further due to a dip in the Cryptocurrency market precipitated by the tumble of hedge fund Three Arrows Capital and FTX crypto exchange, leading Genesis’ lending arm to declare bankruptcy back in January. This has been coupled with public disagreements regarding the financial contribution for customer remuneration between the founders of the Gemini exchange, the Winklevoss twins, and Barry Silbert, the founder of DCG.
However, the silver lining of this complex situation stems from the significant collateral held by Gemini, an estimated 30 million shares of the Grayscale Bitcoin Trust (GBTC), valued at a considerable $607 million. Combined with the estimated returns from the Genesis bankruptcy estate, the Earn program customers could receive between $440 million and $765 million. According to an undisclosed DCG executive, “They’re looking at total recoveries of a billion dollars or more, which is roughly their total claim”.
Yet, here lies another intricate facet of the equation. Depending upon the agreement’s final form, to be shared on Oct. 6, repayments could be made ‘in-kind’. This indicates that some crypto holders might receive crypto itself, rather than United States Dollars. As we step closer to the deadline for the vote on Dec. 5, with hopes of confirming a plan before the year ends, the future of Gemini‘s Earn program users hangs in the balance and full recovery still sincerely anticipated, rather than being definitively confirmed.
Source: Coindesk
