Image Source: Shutterstock
Gemini Earn creditors could potentially face up to 70% reduction in their promised crypto payouts as part of a proposed reorganization plan.
The plan, outlined in an email sent by Gemini Trust on December 13, has now been put up for a vote, leaving creditors with a difficult decision to make.
According to the proposed plan, creditors will receive a payout equivalent to their Earn crypto balances as of January 19, 2023, which is the date when Gemini’s lending partner, Genesis Global Capital, filed for bankruptcy.
However, the value of Bitcoin and Ether at that time was considerably lower compared to their current market rates.
Bloomberg exchange-traded fund analyst James Seyffart described the plan as “brutal,” considering that Bitcoin was valued at $20,940 and Ether at $1,545 then, while they are now valued at $42,750 and $2,250, respectively.
In the worst-case scenario, where creditors receive a 61% recovery, each Bitcoin a creditor had in their Gemini Earn account would only be worth $12,773, representing just 30% of its current value.
This could be brutal. Granted seems to be worst case scenario but Gemini Earn users could be getting potentially just 61% of the value of their crypto from Jan 19, 2023. WOOF.
Even at 100% it stings based on current prices. Thats 61%-100% of:
Bitcoin $20,940
Ethereum $1,545 https://t.co/A6u28U3dsi pic.twitter.com/5SKZnlRjr9
— James Seyffart (@JSeyff) December 14, 2023
Gemini Users Frustrated Over New Payout Plan
The potential reduction in payouts has sparked strong opposition from Gemini’s users, who have taken to the platform to voice their frustrations and urge fellow creditors to reject the proposed plan.
Commenters on Gemini’s platform expressed their outrage, describing the plan as a “spit in our faces” and an “absolute disgrace.”
Some accused Gemini of deceiving and lying to its customers for over a year, referring to the assurance given by the exchange that it would not be subject to counterparty risk from Genesis.
Users demanded the full return of their funds, deeming anything less as unacceptable.
“After a year this is absolutely insane. You killed our souls. You damaged our hearts and health,” one Gemini user said.
“We give you crypto coins and want our crypto back. The same amount. DCG forced you to do what ever they want. You couldn’t do anything!!! Unbelievable.”
After a year this is absolutely insane. You killed our souls. You damaged our hearts and health. We give you crypto coins and want our crypto back. The same amount. DCG forced you to do what ever they want. You couldn’t do anything!!! Unbelievable
— ANNA (@AvaAzadpour) December 14, 2023
Gemini Earn was a program that allowed users to earn interest in cryptocurrencies.
The program relied on funds withdrawn from Genesis to facilitate the offering, which later resulted in Genesis filing for bankruptcy.
Currently, Gemini is seeking to recover $1.6 billion from Genesis to compensate Earn users.
Creditors have until January 10, 2024, at 4 pm Eastern Standard Time to accept or reject Gemini’s proposed plan.
If accepted, the bankruptcy court overseeing the case will make the final decision on approving the plan on February 14, 2024.
The post Gemini Earn Users Face Potential 70% Reduction in Promised Bitcoin Payouts Under Proposed Reorganization Plan appeared first on Cryptonews.