April 19, 2024
Gemini Creditors Protest Harsh Bitcoin Reduction Plan
Bitcoin News

Gemini Creditors Protest Harsh Bitcoin Reduction Plan

Gemini Earn users may face a significant reduction in their expected Bitcoin payouts, with a proposed plan suggesting a potential recovery of only 61% in the worst-case scenario. Gemini Trust sent an email to creditors on Dec. 13 outlining the plan, which is now up for a vote.

According to the proposal, creditors would receive payouts based on their Earn crypto balances as of Jan. 19, 2023, the date when Gemini’s lending partner, Genesis Global Capital, filed for bankruptcy.

Critics, including Bloomberg’s James Seyffart, view the plan as harsh, considering Bitcoin and Ether were valued at $20,940 and $1,545 at the time.

The assets have since surged to $42,750 and $2,250, respectively. In the worst-case scenario, where creditors recover 61%, each Bitcoin would be worth only $12,773, or 30% of its current value. Gemini users expressed strong opposition to X, with calls to “VOTE NO.”

Criticisms included accusations of deception and theft, with users demanding the return of all funds. The discontent is related to Gemini’s prior assurances that it would not be exposed to counterparty risk from Genesis.

Gemini Earn, a program for earning interest in cryptocurrencies, involved withdrawing hundreds of millions from Genesis before its bankruptcy.

The cryptocurrency exchange is seeking to recover $1.6 billion from Genesis on behalf of Earn users. Creditors have until Jan. 10, 2024, to accept or reject the proposed plan. If accepted, the bankruptcy court will make the final decision on Feb. 14, 2024.

Image by pvproductions on Freepik

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