As reported by CNN, Gemini, the cryptocurrency exchange and custodian, announced a significant recovery for customers affected by the fallout of FTX. According to the announcement, customers can expect to recover more than three times the value of their digital assets tangled up in the FTX fallout, marking a rare outcome for creditors involved in a bankruptcy.
The exchange, founded by twin brothers Cameron and Tyler Winklevoss, revealed that it has secured a 232% recovery for customers who participated in its lending program, Earn, in partnership with a third party that halted withdrawals during the upheaval in crypto markets in November 2022. More than 230,000 Gemini customers reportedly lost access to approximately $940 million worth of digital assets. Over the ensuing year and a half, the value of the frozen funds surged to $2.18 billion with the comeback of the crypto market.
Cameron Winklevoss, Gemini’s president, expressed delight over the recovery for customers, acknowledging the hardship caused by the prolonged process and expressing gratitude for their customers’ support and patience. “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.”
As per the agreement reached in February, Gemini committed to returning at least $1.1 billion to customers of the lending program and paying a $37 million fine for unsafe and unsound practices as part of a settlement with the New York Department of Financial Services.
The recent announcement factored in the appreciation of value in crypto, adding more than $1 billion to the total. For example, if a customer had lent one bitcoin in the Earn program, they can now expect to receive one bitcoin back.
During the FTX fallout, bitcoin's value sank to around $17,500, causing chaos in crypto markets. However, a year and a half later, one bitcoin is now valued at just under $70,000, contributing to the improved recovery for affected customers. Gemini stated that Earn program customers can anticipate receiving their remaining asset balance within the next 12 months.
Additionally, customers of FTX, once the second-largest crypto exchange globally, are also expected to be made financially whole, with interest, partly due to the increasing value of FTX’s crypto portfolio and well placed bets on artificial intelligence that the company was able to liquidate.
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