Customers of the crypto platform Gemini can expect to recover more than three times the value of their digital assets that were ensnared in the fallout of FTX — a rare outcome for creditors involved in a bankruptcy.
Gemini, the exchange founded by Cameron and Tyler Winklevoss, said Wednesday that it has secured a 232% recovery for customers who participated in its lending program, Earn, a partnership with a third party that halted withdrawals as turmoil gripped crypto markets in November 2022.
More than 230,000 Gemini customers lost access to approximately $940 million worth of digital assets. In the year and a half since then, crypto has staged a comeback, bringing the value of the frozen funds to $2.18 billion.
“We are thrilled that we have been able to achieve this recovery for our customers. We recognize the hardship caused by this lengthy process and appreciate our customers’ continued support and patience throughout,” Cameron Winklevoss, Gemini’s president, said in a statement.
Gemini agreed in February to return at least $1.1 billion to customers of the lending program and pay a $37 million fine for unsafe and unsound practices as part of a settlement with the New York Department of Financial Services.
Wednesday’s announcement accounts for the appreciation of value in crypto, adding more than $1 billion to the total.
If, for example, a customer had lent one bitcoin in the Earn program, they can now expect to receive one bitcoin back.
At the time FTX imploded, causing chaos in crypto markets, bitcoin sank precipitously to around $17,500. A year and a half later, one bitcoin fetches just under $70,000.
Earn customers can expect to receive their remaining asset balance within the next 12 months, Gemini said.
Customers of FTX, once the second-largest crypto exchange on the planet, are also expected to be made whole, with interest, thanks in part to the rising value of FTX’s crypto holdings and smart bets on artificial intelligence that it was able to liquidate.
