The 340,000 Gemini Earn clients with funds frozen on the bankrupt Genesis platform will share another $100 million from the exchange.
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Bankrupt crypto lender Genesis has reached an agreement that will see holders of its Earn accounts get as much as 80% of their funds back.
On Feb. 6, Genesis Global announced that it has reached an "agreement in principle" with parent company Digital Currency Group (DCG) and its main creditors that "provides a clear path to a consensual resolution that maximizes value," said Paul Aronzon, one of the Genesis board members overseeing its restructuring.
That includes the 340,000 Gemini Earn clients who had $900 million tied up in the bankruptcy.
Assuming it's approved by the court, the plan is "a critical step forward towards a substantial recovery of assets for all Genesis creditors," Gemini exchange President Cameron Winklevoss said on Twitter.
He also announced that as part of the deal, Gemini will contribute $100 million to its customers as part of its "continued commitment to helping Earn users achieve a full recovery."
That said, it's not yet clear from the announcement how much the Gemini Earn customers will recover, although one creditor firm's numbers suggest 80% — before the $100 million. Genesis owes its 50 largest customers $3.5 billion.
As part of the proposed agreement, DCG will trade that $1.1 billion note for stock in the company. It will also take the $526 million it owes Genesis in loans due later this year and refinance it as a pair of loans worth roughly $500 million payable to the creditors.
Finally, DCG will give its equity stake in crypto broker Genesis Global Trading to the holding company of Genesis Global Capital — the crypto lending arm that powered Gemini Earn.
Together this amounts to a predicted "recovery rate of approximately $0.80 per dollar deposited, with a path to $1.00," said crypto yield platform Donut, a Genesis creditor.
Having an agreement in place for the judge that is backed by most major creditors should make the judge's approval fairly simple and get account holders their funds back a lot more quickly.