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Gemini creditors revolt over ‘brutal’ Bitcoin slashing reorg plan

Gemini creditors revolt over ‘brutal’ Bitcoin slashing reorg plan


Gemini Earn creditors are fuming over a proposed reorganization plan that could see their promised Bitcoin (BTC) payouts effectively slashed to about 30% of what they’re worth at current market rates.

In an X post, Gemini Trust revealed it sent creditors an email on Dec. 13 outlining the proposed plan, which has now been put up for a vote.

Under the proposed plan, creditors will receive a payout equal to their Earn crypto balances as of Jan. 19, 2023 — the date that Gemini’s cryptocurrency lending partner Genesis Global Capital filed for bankruptcy.

Some observers, including Bloomberg exchange-traded fund analyst James Seyffart, described the plan as “brutal” given the price of Bitcoin and Ether (ETH) was only $20,940 and $1,545 then, compared to how much they’re worth today — $42,750 for Bitcoin and $2,250 for Ether.

This would mean that in the worst-case scenario where creditors are given a 61% recovery, each Bitcoin that a creditor had on Earn would only be given $12,773, or 30% of what a Bitcoin is worth today.

Commenters of Gemini’s X post appeared in fierce opposition to the plan, with many of them urging creditors to “VOTE NO.”

One X (formerly Twitter) user “Andrew Aleid, said: “I vote no because this is a spit in our faces. Absolute disgrace.”

“You stole our money. Give it ALL back, every single dollar,” said Ian Malcolm in response to Gemini Trust’s X post. She added:

“How can any of your customers believe a single word you say when you have deceived and lied to us for WELL over a year.” Malcolm’s comments were made in reference to Gemini reassuring customers that it would not be subject to counterparty risk from Genesis.

Another X user, BC, said everyone should be paid back in full. “Anything less is unacceptable.”

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