Gemini To Cough Out $50M in NYAG Settlement Over Earn Program

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In a significant legal development, the crypto exchange Gemini paid a $50 million settlement to compensate investors in its Gemini Earn program. This resolution was announced by the New York Attorney General’s (NYAG) office.

 NYAG, Letitia James in a press release noted that the recovery of the $50 million was for over 230,000 investors which include a minimum of 29,000 New York residents who got defrauded by investing in the Gemini Earn program.

Details of the Settlement

The program allowed customers to lend their cryptocurrency to Genesis Global Capital, LLC, offering returns of up to 7.4 percent annual percentage yield (APY). However, the company has since been declared bankrupt. Thus, the settlement addresses allegations that Gemini misled thousands of investors, including many in New York, regarding the risks associated with the Gemini Earn program.

As per the recovered money, it will settle all defrauded investors and ensure they receive in full the assets invested in the Earn program that was locked in when bankruptcy was declared. The Gemini Earn program was terminated in January of 2023.

Gemini Barred From Operating Crypto Lending in NY

Notably, James criticized Gemini for denying investors access to their accounts after promoting the program as a secure investment vehicle. “Today’s settlement will make defrauded investors whole and should remind cryptocurrency companies that deceiving investors is illegal and will not be tolerated by my office,” James stated.

As a punitive measure, Gemini has been prohibited from operating any crypto lending programs within New York State. The NYAG also requires Gemini to be cooperative with her office in the expanded lawsuit filed against Digital Currency Group (DCG), DCG’s CEO Barry Silbert, and Genesis’ former CEO Soichiro Moro.

Investor Compensation and Company Response

In May, Gemini announced that users of the Earn program would recover $2.18 billion worth of their crypto in-kind. The implication was that customers would receive the exact amount and type of cryptocurrency they lent. This represents a 232% recovery from the time withdrawals were halted in November 2022.

As per Gemini’s statement, it confirmed that the “final Earn distributions” would be available in customer accounts within seven days. The exchange expressed satisfaction with the settlement reached and appreciated its customers. 

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