The reorganization plan proposed by defunct crypto lender Genesis has recently caused an uproar among Gemini Earn users. According to the plan, users may only receive 61% of the value of their crypto holdings as of January 19, 2023. While some are hopeful about the potential recovery, others have expressed concern about various aspects of the plan. Let’s dive into the details and understand why this plan is causing widespread outrage.
Gemini’s website update revealed that Earn users would soon receive an email outlining the proposed plan. Genesis estimates that users could recover anywhere between 61% and 100% of the value of their pending Earn balance. This estimation is based on the price of Bitcoin and Ethereum as of January 19, 2023. However, it is important to note that the value of these cryptocurrencies has significantly increased since then. Bitcoin, for example, has surged to more than $40,000, while Ethereum has exceeded $2,000.
Bloomberg ETF analyst, James Seyffart, has labeled the plan as “brutal.” He believes that even if users were to receive 100% of the value, it would still sting due to the current prices. Users shared similar sentiments, pointing out the complexity of the 374-page plan. Many expressed the need for assistance to fully comprehend its implications. Additionally, concerns were raised regarding the potential misleading nature of the promised 61% recovery. Calculations indicate that users may actually receive only 30.5% of their assets, taking into account previous aspects of the plan and the designated petition date.
One possible implication of the plan is the fluctuation of cryptocurrency prices. If users were to receive redemptions in fiat currency, they might end up with significantly less than the current dollar amount of their assets. However, according to the update, users will receive the same digital assets they loaned to Genesis. The goal is to prioritize the return of digital assets rather than converting them into fiat.
Gemini’s website update states that Earn users must vote on the plan before January 10, 2024. If the plan is approved, an initial distribution of Genesis’s assets will be made to Earn users. In addition to this distribution, Gemini will continue legal actions against Genesis to recover $1.6 billion for the users’ benefit. However, if the plan is rejected, Genesis will be forced to explore alternative options. This could potentially lead to delays in distributions by several months.
The reorganization plan proposed by Genesis for Gemini Earn users has triggered a wave of criticism and concern. The estimated recovery of 61% to 100% of the value of their crypto holdings has raised questions about fairness and transparency. The complexity of the plan, along with potential fluctuations in cryptocurrency prices, further complicates the situation. As users weigh the options and prepare to vote, the future remains uncertain. Only time will tell how this controversial plan will impact Gemini Earn users and the wider cryptocurrency community.
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