Crypto exchange firm Gemini returning $2.2B worth digital assets to users

By Ovunc Kutlu

ISTANBUL (AA) - Cryptocurrency exchange company Gemini announced Wednesday it is returning $2.2 billion worth of digital assets to its customers, who had their funds frozen in the firm's defunct lending program.

The firm said in a post on X that approximately 97% of the digital assets owed to users, as initial Earn distributions, will now be available at their Gemini accounts after the program's suspension date of Nov. 16, 2022.

"The initial distributions are in kind, meaning that if you lent one bitcoin in the Earn program, you will receive one bitcoin back. And it means that you will receive any and all increase in the value of your assets since you lent them into the Earn program," the post said.

Users will receive their remaining asset balance within the next 12 months, it added.

The company's Earn program was an optional crypto lending program in which Gemini customers could lend funds to the company. It was announced in early 2021 in partnership with crypto brokerage firm Genesis, offering 7.4% return on customers' deposits.

Gemini in February settled with the New York Department of Financial Services to return at least $1.1 billion to its customers that were part of the program, after the bankruptcy proceedings of Genesis that filed for Chapter 11 in January 2023.

"Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown,” Adrienne A. Harris, the agency's superintendent, said on Feb. 28.

While Genesis defaulted on approximately $1 billion worth of loans made by Gemini's Earn customers in November 2022, it declared bankruptcy two months later.

Gemini was founded in 2014 by American investor brothers Tyler and Cameron Winklevoss.