Gemini Trust Proposes Plan for Reduced Payouts to Creditors
Gemini Trust has put forward a reorganization plan that could lead to creditors of its Gemini Earn program receiving up to 70% less in cryptocurrency payouts. The proposed plan, which has been sent to creditors for a vote, would see them receive payouts based on their Earn crypto balances as of January 19, 2023. However, the value of cryptocurrencies like Bitcoin and Ether was significantly lower at that time compared to their current market prices.
Analyst Labels Plan “Brutal” Due to Cryptocurrency Value Contrast
Analyst James Seyffart criticized the plan, highlighting the drastic difference in cryptocurrency values. He noted that at the time the plan was formulated, Bitcoin and Ether were priced at $20,940 and $1,545, respectively. These figures pale in comparison to their current values of $42,794 and $2,276.
Creditors Given Deadline to Vote on Proposed Plan
Creditors have until January 10, 2024, to cast their vote on the proposed plan. If accepted, the plan will then be subject to final approval by the bankruptcy court overseeing the case, with a decision expected on February 14, 2024.
Gemini Users Express Outrage Over Reduced Payouts
The significant reduction in payouts has sparked anger among Gemini’s customers. Many users have condemned the proposal on social media platforms, calling it a “spit in our faces” and an “absolute disgrace.” Some users accused Gemini of misleading them for over a year regarding counterparty risk. Others believe that full repayment is the only acceptable outcome.
About Gemini Earn Program and Recovery Efforts
The Gemini Earn program allowed users to earn interest on their cryptocurrency holdings. Before Genesis’s bankruptcy, Gemini had withdrawn hundreds of millions of dollars from the firm to support the program. The exchange is now seeking to recover $1.6 billion from Genesis for Earn users.
Hot Take: Gemini Trust’s Controversial Payout Plan Faces Backlash
Gemini Trust’s proposed plan for reduced payouts to creditors of its Gemini Earn program has generated significant backlash. With potential reductions of up to 70% in cryptocurrency payouts, users have expressed their displeasure and disappointment on social media. The stark contrast in cryptocurrency values at the time of the plan’s basis and current market prices has been highlighted as a major concern. Creditors have until January 10, 2024, to vote on the proposed plan, which will then be subject to final approval by the bankruptcy court. The outcome of this decision, expected on February 14, 2024, will determine the fate of the payout plan and its impact on Gemini’s customers.
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