Major crypto exchange Gemini is suffering from the crypto contagion on one of its products, the popular “Gemini Earn.” This product allowed users to receive a yield by depositing their funds on this platform. Users were able to earn as much as 8% on their crypto.
Gemini partnered with crypto lender Genesis, a subsidiary of the Digital Currency Group (DCG), to offer this product. According to several reports, Genesis suffered from a liquidity crunch following the collapse of the crypto exchange FTX and now owns Gemini Earn users over $900 million.
Gemini Earn clients joined forces to act and get their funds back. These users have seen Gemini’s latest measures and possible solutions but have reservations and have lost faith in the exchange’s capabilities to return their funds without pressure.
Gemini Aims To Expand By Acquiring LedgerX
In this context, with almost a billion dollars owned to its Gemini Earn customers, the crypto exchange might acquire LedgerX. A company valued at about $300 million, or a quarter of what it owns to its Earn users.
Per a report from Reuters, following the collapse of its parent company, FTX, LedgerX has attracted the attention of major crypto companies, including Gemini and Blockchain.com. LedgerX is under the supervision of the U.S. Commodity Futures Trading Commission (CFTC).
In that sense, its owner can offer different financial products to U.S. customers, one of the most attractive markets. Its acquisition would allow Gemini to expand its foothold in the sector.
In the meantime, Gemini Earn customers must await a resolution regarding Genesis. The DCG-owned company is looking for partners to raise emergency funds and resume operations. This solution would allow Gemini Earn customer to get their funds back.
In an official post, Gemini claims it is taking additional steps to make its clients whole:
Gemini has also formed an ad hoc committee with other creditors (Creditor Committee) to coordinate efforts and advocate together. Returning your funds is our highest priority and we are operating with the utmost urgency.
Gemini Should Take The Responsibility
However, users believe that Gemini Earn is a product offered by the crypto exchange Gemini and therefore, this company should provide an immediate solution to its customers. If the company can complete a $300 million acquisition, it should have enough liquidity to reach an agreement with its customers.
The Gemini Earn program was promoted as a “real yield, real return” product to its customers. People trusted their non-fungible tokens (NFTs) and digital assets to the platform in hopes of leveraging an innovative use case capable of mitigating inflation.
The current situation goes against the vision sold to Gemini’s users. Furthermore, the crypto exchange has failed to communicate with its customers. Many feel disenchanted with Gemini, a platform that they thought was safe.
Per a report from Forbes, the exchange’s founders Cameron and Tyler Winklevoss, have the funds to make their clients whole. A Gemini Earn client told Forbes: “You should open up your own wallet. Please fix this and don’t ruin millions of lives here.”
These individuals have taken it upon themselves to fight for their funds. In that sense, they created a community across social media platforms to agree on future actions and join a class action lawsuit against Gemini Earn. They may also ask the regulators to investigate the actions of Gemini Earn management.
The consequences of this initiative will ripple across the nascent sector as others might feel inspired to take action and attempt to recover their funds from other failed platforms. More information about the proposed action against Gemini Earn as well as other platforms that may have wronged its customers on this website.
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