1 year ago
Gemini Earn customers look a imaginable $485 cardinal shortfall successful their bid to beryllium made full pursuing the Genesis bankruptcy.
Gemini Earn paid rewards to customers who lent cryptocurrency to the program. Customers’ tokens were past loaned to counterparties, successful this case, Genesis, who make output by trading and investing.
After months of insolvency rumors, Genesis filed for Chapter 11 bankruptcy connected Jan. 19, triggering panic among its creditors.
The bankruptcy filing showed that Genesis owed its creditors $3.5 billion; the largest is Gemini, with a $769 cardinal equilibrium due.
In an unexpected development, Genesis present claims it has fulfilled its obligations to Gemini by paying retired the proceeds of a backstage merchantability of Grayscale Bitcoin Trust (GBTC) shares that collateralized the debt.
Gemini Earn customers connected the backmost foot
On Aug. 15, 2022, Genesis pledged 30.9 cardinal GBTC shares arsenic collateral for Gemini Earn’s customers’ tokens. This statement was aboriginal extended connected Nov. 7, 2022. Incidentally, FTX filed for bankruptcy connected Nov. 11, 2022, pursuing weeks of insolvency rumors beforehand.
On Nov. 16, 2022, Genesis froze withdrawals from its level and informed Gemini that it had sold the collateralized GBTC shares astatine $9.20 per share, netting $284.3 million. However, with a equilibrium owed of $769 million, the shortfall amounts to $484.7 million.
Given the “behind-the-scenes” statement betwixt the 2 parties, Genesis present claims the $769 cardinal equilibrium owed to Gemini Earn customers has been paid with the GBTC stock sale.
What now?
The quality requires the justice overseeing the bankruptcy to marque a telephone connected whether the statement stands. However, Gemini volition apt situation the claim, resulting successful tribunal action.
This could further hold the bankruptcy case, meaning Gemini Earn customers whitethorn beryllium acceptable for a agelong hold earlier recovering their funds. However, the $284.3 cardinal whitethorn beryllium each that is due.
In a further blow, Genesis classified Gemini arsenic a “Class IV” unsecured creditor. Gemini Earn customers are down organization creditors, secured creditors, and precedence claims successful carving retired the company’s remaining assets.
The station Gemini Earn customers look imaginable $485M shortfall successful Genesis bankruptcy case appeared archetypal connected CryptoSlate.
English (US) 