Gemini Earn's creditors are angry over a proposed restructuring plan that could see their promised Bitcoin (BTC) payouts effectively cut to around 30% of their value at current market prices.
In an
Under the proposed plan, creditors will receive a payout equal to their Earn crypto balance starting January 19, 2023 – the date Gemini's cryptocurrency lending partner Genesis Global Capital filed for bankruptcy.
Some observers, including James Seyffart, an exchange-traded fund analyst at Bloomberg, described the plan as “brutal” as the price of Bitcoin and Ether (ETH) at the time was only $20,940 and $1,545, respectively, compared to today’s value – $42,750 -dollars for Bitcoin and $2,250 for Ether.
That could be brutal. Granted, this seems like the worst-case scenario, but Gemini Earn users could potentially only receive 61% of the value of their crypto as of January 19, 2023. WOOF.
Even at 100% it's burning, considering current prices. That's 61-100% of:
Bitcoin $20,940
Ethereum $1,545 https://t.co/A6u28U3dsi pic.twitter.com/5SKZnlRjr9
— James Seyffart (@JSeyff) December 14, 2023
This would mean that in a worst-case scenario, if creditors are granted a 61% repayment, each Bitcoin a creditor had on Earn would only receive $12,773, or 30% of what a Bitcoin is worth today.
Commenters on Gemini's X post spoke out vehemently against the plan, with many of them urging creditors to vote “NO.”
#gemini #geminiearn
VOTE NO pic.twitter.com/hz3ZrvoxWY
— jeffscottworld (️, ) (@jeffscottward) December 13, 2023
One-X user (formerly Twitter) “Andrew Aleid” said: “I'm voting no because it's spitting in our faces. Absolute disgrace.”
“You stole our money. “Give back EVERYTHING, every single dollar,” responded Ian Malcolm to Gemini Trust’s X contribution. She added:
“How can any of your customers believe a single word you say when you have deceived and lied to us for over a year?” Malcolm's comments referred to Gemini, which assured its customers that the company was not exposed to counterparty risk from Genesis.
Another X user, BC, said everyone should get their full refund. “Anything else is unacceptable.”
After a year it's absolute madness. You killed our souls. You have damaged our hearts and our health. We give you crypto coins and want our crypto back. The same amount. DCG has forced you to do whatever they want. There was nothing you could do!!! Incredible
— ANNA (@AvaAzadpour) December 14, 2023
Gemini Earn was a program where users purchase interest in cryptocurrencies. Gemini diverted hundreds of millions of dollars from Genesis to make the program possible before Genesis went bankrupt.
The cryptocurrency exchange is now trying to reclaim $1.6 billion from Genesis for Earn users.
Related: The New York Attorney General is suing Gemini, Genesis and DCG for alleged investor fraud
Creditors have until January 10, 2024 at 4 p.m. Eastern Standard Time to accept or reject Gemini's plan.
If the plan is approved, the bankruptcy court hearing the case will decide on February 14, 2024 whether to grant final approval to the plan.
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