Creditors of Gemini Earn are expressing strong disapproval of a new reorganization proposal that significantly reduces the Bitcoin repayment value to only about 30% of the current market rate.
Gemini Trust conveyed the details of this proposal to creditors via email on Dec. 13, as mentioned in a social media post. The plan, now up for voting, outlines the conditions under which creditors would be compensated.
According to the proposal, creditors would be paid back based on the value of their crypto holdings as of Jan. 19, 2023. This date coincides with the bankruptcy filing of Genesis Global Capital, Gemini’s cryptocurrency lending partner.
The market prices of Bitcoin and Ether were considerably lower at the time, standing at $20,940 and $1,545, respectively. With the current values at $42,750 for Bitcoin and $2,250 for Ether, the proposed plan implies that creditors would receive only about 30% of the current value of Bitcoin in the worst-case scenario of a 61% recovery.
The reception to Gemini’s plan on social media has been overwhelmingly negative, with many users vocally urging others to reject the proposal.
One X user, Anna, expressed her outrage, writing:
Leslie, another user, accused Gemini Trust of deception:
BC, echoing the sentiments of many, insisted on full repayment: “Anything less is unacceptable.”
Gemini Earn, the program in question, allowed users to earn interest in cryptocurrencies. Gemini had withdrawn substantial funds from Genesis to support this program before Genesis declared bankruptcy.
Gemini is now attempting to reclaim $1.6 billion from Genesis for its Earn users. Creditors have until Jan. 10, 2024, to decide on the proposal, with the bankruptcy court set to make a final decision on Feb. 14, 2024, if the plan is approved.