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Gemini to Pay $50 Million in Settlement with NY Attorney General’s Office

Gemini Exchange

Crypto exchange Gemini has agreed to pay $50 million in digital assets to Gemini Earn investors as part of a settlement announced by the New York Attorney General on Friday. This settlement follows accusations from NYAG Letitia James that Gemini misled thousands of investors, including New Yorkers, about the risks associated with the Gemini Earn program. The program allowed customers to loan their crypto to the now-bankrupt Genesis Global Capital, LLC, and earn up to 7.4% APY.

James stated, “Gemini marketed its Earn program as a way for investors to grow their money, but actually lied and locked investors out of their accounts. 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.”

The settlement ensures that all defrauded investors will fully recover the assets they invested in the Earn program but were unable to withdraw when the program collapsed. As part of the agreement, Gemini is also banned from conducting any crypto lending programs in New York state.

The NYAG filed a complaint in October against Gemini, the crypto lending firm Genesis, and the crypto investment company DCG. James asserted that Gemini lied to investors, repeatedly assuring them that investing in the Earn program through Genesis was low risk when it was, in fact, riskier. Meanwhile, DCG, Genesis, and two executives were accused of disguising $1.1 billion in losses through a months-long campaign of misstatements, omissions, and concealment.

Last month, Gemini announced that Earn users would recover $2.18 billion of their crypto in-kind, meaning customers who lent one bitcoin would receive one bitcoin back. These distributions represent a 232% recovery from when withdrawals were halted in November 2022, according to Gemini.

READ:  Genesis to Pay $21M SEC Penalty in Settlement Over Gemini Earn Product

Gemini stated that “final Earn distributions” will be available in customers’ accounts within seven days. The company also expressed satisfaction with the settlement, saying, “We are pleased to announce that in connection with the final Earn distribution, Gemini has entered into an agreement with the New York Attorney General (NYAG) to settle the lawsuit brought against Gemini on October 19, 2023. We are excited to deliver this full recovery to you and appreciate your ongoing patience and support throughout this process.”

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