Crypto exchange Gemini said users of its now-defunct Earn product received $2.18 billion in digital assets, according to a May 29 statement.
These payouts amount to 97% of the total digital assets owed to Earn users, marking a significant recovery since the collapse of cryptocurrency lender Genesis, which halted withdrawals in November 2022.
Distribution in kind
The exchange explained that the assets were returned in kind, meaning that if a user lent one Bitcoin to the Earn program, they would receive one BTC back. This would represent a 232% recovery for Earn users, as the value of several digital assets has increased significantly compared to two years ago.
Gemini founders Cameron and Tyler Winklevoss emphasized the significance of this recovery, stating:
“This represents an unprecedented recovery among crypto bankruptcies, as well as bankruptcies in general, and follows our previous announcement that we have reached a settlement in principle with Genesis and other creditors in the Genesis bankruptcy, which will result in all Earn users receiving 100 % of their digital assets returned in kind.”
Meanwhile, Gemini emphasized that Genesis’ bankruptcy was not the result of problems within the crypto industry, but stemmed from “old-fashioned financial fraud, exacerbated by a lack of regulatory clarity” in the US.
Therefore, the company emphasized its commitment to advocating for better regulatory measures to support the sector. There stood:
“We will continue to fight for clear rules and guidelines for our sector that promote both innovation and consumer protection. And we will win this battle. The future is bright.”
Sales pressure ahead?
Industry analysts warn that in-kind distributions could create significant selling pressure as creditors liquidate their assets.
Evan Cohen, a thesis investor, noted:
“Lots of vendors [are] now ready to unload their crypto blocked for 2 years.”
This increased trading activity could impact Bitcoin and Ethereum prices. Crypto Slates data shows a modest decline of 0.73% in the broader market over the past 24 hours, with BTC and ETH prices now at $67,640 and $3,761 respectively.