Cryptocurrency exchange Gemini has unveiled a reorganization plan that estimates users of its Gemini Earn platform will only recover between 61% and 100% of the value of their pending Earn balance as of January 19, 2023. The plan, disclosed in an update on Gemini’s website, has sparked widespread outrage among users who label it as “brutal” due to the significant discrepancy between the projected recovery and current market prices.
According to the update, Gemini is estimating that Earn users will be able to recover anywhere between 61% and 100% of the value of their pending balance. However, this estimate is based on the price of Bitcoin and Ethereum on the petition date, with Bitcoin at $20,940 and Ethereum at $1,545. Since then, the value of these assets has skyrocketed, with Bitcoin surpassing $40,000 and Ethereum surpassing $2,000. This means that even at the upper limit of 100%, users are still facing a significant loss compared to the current market prices.
Gemini Earn users have expressed their outrage and dissatisfaction with the proposed plan. Bloomberg ETF analyst James Seyffart refers to the plan as “brutal” and highlights the potential disappointment users may face with only 61% of their assets being recovered. Users have pointed out the complexity of the 374-page document outlining the plan, suggesting that many may require assistance to fully comprehend it. Additionally, some have raised concerns that the promised 61% could be misleading, as calculations may suggest an actual return of only 30.5% of their assets.
The update clarifies that users will receive the same digital assets they loaned to Genesis, rather than fiat redemption. However, if the option for redemption in fiat currency were to be offered, users may receive significantly less than the current dollar amount of their assets. This is due to the volatility and fluctuating prices of cryptocurrencies. It is important for users to understand this aspect of the plan and assess the potential impact on their overall recovery.
Gemini’s website update emphasizes the importance of users voting on the proposed plan before January 10, 2024. If approved, there will be an initial distribution of Genesis’s assets to Earn users. The exchange also expresses its commitment to pursue legal actions against Genesis to recover $1.6 billion for the benefit of Earn users. However, if the plan is rejected, Gemini states that Genesis will be forced to explore alternative options, potentially resulting in further delays in the distribution of assets.
The reorganization plan proposed by Gemini to its Earn platform users has caused significant backlash and disappointment among the community. The projected recovery of only 61% to 100% of the value of their pending balances falls well short of the current market prices. Users have raised concerns about the complexity of the plan, the potential misleading nature of the recovery estimate, and the impact of fiat redemption on their recoveries. It is now up to the users to carefully assess the plan and cast their votes before the deadline, with the potential outcome having significant implications on the recovery process.