Institutions
Institutions
Gemini Earn Updates
This page aims to bring as much transparency as possible to the process of finding a resolution for all Earn users to redeem their assets.
Gemini — acting as agent on behalf of Earn users — has been in ongoing conversations with Genesis Global Capital, LLC (Genesis), Digital Currency Group, Inc. (DCG), the parent company of Genesis, and Barry Silbert (CEO of DCG) in an effort to find a resolution as soon as possible.
Gemini has also formed an ad hoc committee with other creditors (Creditor Committee) to coordinate efforts and advocate together. Returning your assets is our highest priority and we are operating with the utmost urgency.
At a minimum, we will update this page on Tuesday and Friday of each week until a resolution has been reached.
Updates
January 13, 2023 (Friday)
Yesterday, the SEC filed an action against Gemini and Genesis. We are disappointed by this as it does nothing to further our efforts and help Earn users get their assets back. Nonetheless, we will not let this distract us from the important work we are doing to recover your assets. This tweet thread has more information.
January 10, 2023 (Tuesday)
An Open Letter to the Board of DCG, requesting the removal of Barry Silbert as CEO of DCG, was published today. It is now time for the Board to show him the door so that DCG can start working with creditors in earnest to find a resolution. [PDF]
Gemini also filed an Answer in court today in response to a Complaint. Gemini’s Answer contains additional information regarding the fraud that was committed by Barry Silbert, DCG, and Genesis. [PDF]
January 6, 2023 (Friday)
No material update.
January 3, 2023 (Tuesday)
An Open Letter to Barry Silbert, CEO of DCG, was published yesterday. Gemini has stated that Barry Silbert and DCG need to take responsibility for the money owed to Earn users and publicly commit to working together to solve this problem by January 8, 2023.
December 30, 2022 (Friday)
No material update.
December 27, 2022 (Tuesday)
We continued to work through the Christmas holiday towards a resolution. We expect a more fulsome update by the end of this week.
December 23, 2022 (Friday)
We continue to work with Genesis and DCG and are operating with the utmost urgency. All parties remain engaged and collaborative. We will continue to work on your behalf around the clock through the holidays — we will not be slowed down because of this.
December 20, 2022 (Tuesday)
Today, Houlihan Lokey presented a plan on behalf of the Creditor Committee to resolve the liquidity issues at Genesis and DCG and provide a path for the recovery of assets. This plan is based on information received from Genesis, DCG, and their respective advisors to date. The Creditor Committee expects an initial response this week.
December 17, 2022 (Saturday)
Houlihan Lokey, the Financial Advisor of the Creditor Committee, has begun advocating for a plan to resolve the liquidity issues at Genesis and DCG and provide a path for the recovery of funds. It is still early stages, and discussions are ongoing, however, we'll update you as soon as more information is available.
December 16, 2022 (Friday)
No material update.
December 13, 2022 (Tuesday)
No material update.
December 9, 2022 (Friday)
Houlihan Lokey has been engaged as Financial Advisor on behalf of the Creditor Committee.
December 6, 2022 (Tuesday)
Earn Update page is launched.
December 3, 2022 (Saturday)
Kirkland & Ellis has been engaged as counsel on behalf of the Creditor Committee.
November 21, 2022 (Monday)
Message sent to Earn users
November 16, 2022 (Wednesday)
On November 16, 2022, Genesis — the lending partner of the Earn program — paused withdrawals and messaged that they would not be able to meet Earn user redemption requests within the service-level agreement (SLA) of 5 business days. Gemini subsequently paused withdrawals on the Earn program. Blog post here.
Frequently asked questions
Will I lose my money in Earn?
Our understanding is that Genesis paused withdrawals due to a liquidity issue resulting from a liquidity duration mismatch between Genesis’ assets and its liabilities. More specifically, we understand that Digital Currency Group, Inc. (DCG) — the parent company of Genesis — owes Genesis ~$1.675 billion dollars: $1.1b in the form of a promissory note due in June 2032 and ~$575m in the form of an intercompany loan due in May 2023. In the wake of the FTX collapse, Genesis creditors made redemption requests that could not be met immediately due to the market turmoil and the longer timeline of the DCG liability repayments to Genesis. As a result, Genesis paused withdrawals on November 16, 2022.
If our understanding is correct — that this is a liquidity issue (i.e., cash-flow insolvency) – then a full recovery of assets for Earn users is possible. If this is a Genesis balance sheet issue (i.e., balance-sheet insolvency) whereby its assets are less than its liabilities, then a loss of some amount is possible. We do not have an indication at this time that this is a Genesis balance sheet issue, rather a liquidity/cash-flow issue. Our highest priority is to help Earn users recover their assets.
Why is this taking so long?
As mentioned above, we understand this to be a Genesis liquidity issue. If so, Genesis has enough assets to pay its creditors but doesn’t have these assets in a liquid form of payment to do so right now.
Liquidity issues can be solved in a variety of ways including raising capital, raising debt, and/or restructuring existing debt. Raising capital could, for example, involve Genesis selling equity in exchange for cash. Restructuring debt could, for example, involve DCG agreeing to pay down its loans to Genesis sooner. All of these possibilities can take time. Nevertheless, we are doing everything we can to advocate for Earn users and to accelerateGenesis and DCG efforts to resolve this issue.
Does Earn impact other Gemini products and services?
Earn does not impact any other Gemini products and services. Gemini is a full-reserve exchange and custodian. All customer assets held on the Gemini Exchange and in Gemini Custody are held 1-to-1 and available for withdrawal at any time. You can read more here.
What can I expect next?
At a minimum, we will be updating this page every Tuesday and Friday until a resolution has been reached. We believe a regular cadence of communication is important to give you visibility into our efforts. Even if we have no material update, we will say so.
How can I access my Earn History?
To access your Earn history, navigate to the Statements and History page found in your Account Settings, then click "Earn Transaction History" and input a date range. Once you select a date range, click "Download .xlsx" to download an .xlsx file to your device.