Crypto exchange Gemini said users of its now-defunct Earn product received $2.18 billion of their digital assets, according to a May 29 statement.
These distributions amount to 97% of the total digital assets owed to Earn users, marking a significant recovery since the collapse of crypto lender Genesis, which halted withdrawals in November 2022.
In-kind distribution
The exchange explained that the assets were returned in kind, meaning that if a user lent one Bitcoin to the Earn program, they received one BTC back. This would represent a 232% recovery for Earn users, as the value of several digital assets has significantly increased compared to two years ago.
Gemini’s founders, Cameron and Tyler Winklevoss, highlighted 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 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 back in kind.”
Meanwhile, Gemini stressed that Genesis’s bankruptcy was not a result of issues within the crypto industry but stemmed from “old-fashioned financial fraud compounded by a lack of regulatory clarity” in the US.
So, the company emphasized its commitment to advocating for better regulatory measures to support the industry. It stated:
“We will continue to fight for clear rules and guidance for our industry that foster both innovation and consumer protection. And we will win this fight. The future is bright.”
Selling pressure ahead?
Industry analysts warn that in-kind distributions could cause substantial selling pressure as creditors liquidate their assets.
Evan Cohen, a thesis investor, noted:
“Lots of sellers [are] now ready to unload their 2-year locked-up crypto.”
This increased trading activity may affect Bitcoin and Ethereum prices. CryptoSlate’s data shows a modest 0.73% decline in the broader market over the past 24 hours, with BTC and ETH prices now at $67,640 and $3,761, respectively.
