U.S. Bankruptcy Judge Sean H. Lane on May 17 approved Genesis’ Chapter 11 plan, setting up the defunct crypto lending platform to liquidate and kick off distributing $3 billion worth of digital assets.
Gemini Earn launched in 2021 as a partnership between Genesis and Gemini. Under the program, Genesis used digital assets lent to it by Gemini customers in exchange for interest. After crypto giant FTX collapsed in late 2022, Genesis blocked Earn users from withdrawing digital assets lent under the program, which were effectively trapped when Genesis filed for bankruptcy.
Both companies were sued in January 2023 by the U.S. Securities and Exchange Commission over the Earn program, which the agency alleged was an unregistered security. New York’s attorney general filed a similar lawsuit in state court in October alleging both companies misled Earn users, who the office argued were in effect investors.
Judge Lane approved an agreement earlier this year between Genesis and the SEC, under which the SEC would receive an unsecured claim against Genesis for $21 million. A separate $2 billion settlement was reached with the New York attorney general’s office.
