Gemini Earn Users Lose Savings in ‘White Collar Robbery’

In an email sent out to retail users, Gemini wrote that it terminated the Master Loan Agreement between Earn users and Genesis as of Jan. 8

article-image

Christian Horz/Shutterstock.com modified by Blockworks

share

Gemini, the centralized cryptocurrency exchange founded by the Winklevoss twins, has terminated its Earn program after Genesis Global Capital failed to return more than $900 million in assets owed.

In an email sent out to retail users, Gemini wrote that it had terminated the Master Loan Agreement (MLA) between Earn users and Genesis as of Jan. 8. Gemini co-founder Cameron Winklevoss had previously set the date as a deadline for Genesis’ parent company, Digital Currency Group (DCG), to respond to an open letter published on Jan. 2, regarding the untenable status quo.

“This officially terminates the Earn Program and requires Genesis to return all assets outstanding in the program,” the email said. “Existing redemption requests are not impacted and continue to await fulfillment by Genesis.”

Although Gemini has assured customers that the return of their funds “remains our highest priority,” many users have lost faith in recovering lost savings.

One Reddit user who goes by the pseudonym New_Tour_5064 wrote that they had previously viewed Gemini Earn as similar to a 401(k) retirement plan and was unaware of the situation before it was too late.

“That being said I was completely oblivious as to what was going on in the crypto world as of late and didn’t even know my funds were froze[en] until it was too late,” he wrote. “I’m assuming [there] are a lot more like me.”

Users on Twitter have also speculated as to what, if any, funds Earn customers may be able to retrieve. 

Based on the terms and conditions highlighted in an authorization agreement — digital assets will leave Gemini’s custody and customers must “accept the risk of loss associated with loan transactions.”

Loading Tweet..

Although this may absolve Gemini from being legally liable for Earn users’ losses, Redditor Ok-Hornet-1313 wrote that the situation “feels like white collar robbery.”

“Just like ‘hey give us your money and we’ll have fun with it until the market goes bad, then whoopsie sorry you can’t get your money back but thanks for letting [us] play with your money anyway’,” the user wrote. 

In an attempt to return customer funds and restore the exchange’s reputation, Gemini co-founder Cameron Winklevoss accused DCG founder Barry Silbert of failing to act, tweeting “you hide behind lawyers, investment bankers, and process…your behavior is not only completely unacceptable, it is unconscionable.”

When no resolution was reached by the Sunday deadline, he called on the board of DCG to remove Silbert from his position as CEO. 

“There is no path forward as long as Barry Silbert remains CEO of DCG,” Winklevoss wrote.  

Gemini, DCG and Genesis have not responded to Blockworks’ request for comment.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

HYATT REGENCY SALT LAKE CITY

TUES, OCT. 8, 2024

Guided by the expertise of Blockworks Research Analysts team, this one day event will feature senior leaders, entrepreneurs, and developers from across the crypto industry. Attendees will have the opportunity to participate in an immersive experience to explore the latest trends, […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

hivemapper.jpeg

Research

We believe crypto market participants overlook Hivemapper’s fundamental potential due to a poor understanding of both the niche map data market and Hivemapper’s positioning relative to incumbents. Hivemapper’s token model catalyzes both a cost and product advantage via unmatched map freshness and near real-time accuracy, which is its wedge into a market characterized by stale data and high data collection costs. Its current and potential future product suite may represent one of the strongest possibilities for PMF in crypto today.

article-image

Exploit shows centralization can sometimes be an asset

article-image

The Fidelity Ethereum Fund, like other proposed ETH ETFs, seeks to stake a portion of its assets, according to the firm’s Wednesday registration statement

article-image

The DAO first voted on enabling SAFE transfers over a year ago

article-image

The final Bitcoin halving, where the mining reward becomes smaller than one satoshi, is expected to occur in 2140

article-image

The Department of Justice and Commodity Futures Trading Commission announced back-to-back lawsuits against KuCoin Tuesday