Gemini Earn creditors are expressing outrage over a proposed restructuring plan that may result in significantly lower Bitcoin payouts, approximately 30% lower than current market rates.
In a recent announcement on X (formerly Twitter), Gemini Trust disclosed that it had emailed creditors on December 13 to outline the proposed plan, which is currently up for a vote.
Outlined in this plan is a proposal suggesting that creditors would receive payments equivalent to their cryptocurrency balances as of January 19, 2023, the date when Gemini's cryptocurrency lending partner, Genesis Global Capital, filed for bankruptcy.
Critics, such as Bloomberg ETF analyst James Seyffart, have harshly criticized the plan, labeling it as "cruel." At the time of Genesis' bankruptcy filing, Bitcoin and Ethereum were valued at $20,940 and $1,545, respectively. However, their current values have surged to $42,750 and $2,250. This implies that under the proposed plan, where creditors might receive a 61% recovery rate, they would only obtain $12,773 for each Bitcoin they held on Earn, amounting to 30% of Bitcoin’s current value.
Feedback on the Gemini X post indicates strong opposition to the proposed plan, with numerous users advocating for a "no" vote. One user, Andrew Aleid, expressed his discontent by stating, "I'm voting no because this is spitting on us. An absolute disgrace."
Several users, like Leslie, accused Gemini Trust of deceiving them, demanding the return of their funds. Leslie highlighted the erosion of trust due to Gemini's previous assurances that clients were immune to Genesis counterparty risk.
Another user, BC, advocated for a full refund, deeming anything less as unacceptable. Gemini Earn, the program enabling users to earn cryptocurrency interest, was supported by Gemini withdrawing hundreds of millions of dollars from Genesis before its bankruptcy.
Currently, the cryptocurrency exchange is attempting to recover $1.6 billion from Genesis on behalf of Earn users. Creditors have until January 10, 2024, at 4:00 p.m. ET to accept or reject Gemini's proposal. The bankruptcy court presiding over the case will then decide on the final approval of the plan on February 14, 2024, if accepted.
