In November 2022, one of the largest cryptocurrency exchanges, FTX, collapsed. The broader cryptocurrency market lost tens of billions over the next few days. Many crypto players faced the risk of bankruptcy, and the vast investments of millions of customers were either lost or frozen.
One of the most resonant cases was crypto lender Genesis. It suspended withdrawals blaming the recent FTX collapse for spurring a spike in withdrawal requests that undermined the lender’s liquidity. Genesis reported that it owed at least $3.4bn to more than 100,000 creditors.
Crypto assets of many private investors who invested in Genesis through the popular Gemini Earn program were blocked. Most investors were convinced to put money into the program led by the enormous hype resulting from a mix of clever promotions, the involvement and positive Twitter posts of the Winklevoss twins, and the participation of IRA companies.
At the beginning of the story, users received emails stating that their funds were safe. “It was convincing, and I didn’t make any move for withdrawal specifically because of this email and the Winklevoss’ Twitter reassurances that they could be trusted.” – stated one of the affected investors in his Case on the 11thestate Platform.
Many of the affected Investors faced such a situation for the first time in their lives, and it led to a personal financial disaster for some of them.
"I did not know EARN was not part of Gemini. The funds were held on a 3rd party platform and are now frozen. It took 14 years of building equity in our house to earn that money." – stated another one of the affected investors who initiated the Case against Gemini on 11thestate.com, a platform that helps Investors to unite and fight for their rights.
A couple of weeks later, on December 15, Investors received a new user agreement. This agreement stipulated that anyone who signed into their account agreed to their new terms of service, including no longer being able to file class action lawsuits and a local-level resolution limitation.
The new user agreement made investors realize the scale and severity of the problem.
Affected users refused to write off their losses and searched for a way to defend their rights. They united with fellow investors to create the Case on the new 11thestate Platform that critically, helped to find and secure the best Attorney to proceed with a class action.
"Within a month, over 100 attorneys had been contacted by our platform" - said Stan Vick, 11thestate’s Founder.
On December 29, 2022, investors selected their Attorney through online voting to represent their Case. The next day, the Attorney filed a class arbitration with the American Arbitration Association demanding the return of Gemini Earn users’ digital assets.
Currently, the Attorney is working on defending investors’ rights, and Investors are waiting for a positive resolution of the case.
"Although we cannot guarantee that every Case on the platform will win, finally, Investors around the globe have a robust online tool to help to defend their interests." – concluded Stan Vick, the 11thestate founder.