The New York Attorney General’s office recently finalized a settlement with Gemini, a cryptocurrency exchange, resulting in the recovery of $50 million for users who were affected by the closure of the Gemini Earn program. This settlement marks the resolution of legal charges brought against Gemini by the NYAG and prohibits the exchange from operating crypto lending programs in New York.
The Gemini Earn program, which was offered in partnership with Genesis Global Capital, allegedly misled thousands of investors regarding the risks involved. As a result, over 230,000 users, including 29,000 New York residents, were impacted by the program’s failure. New York Attorney General Letitia James stated that Gemini marketed the Earn program as a way for investors to grow their money, but in reality, investors were locked out of their accounts.
As part of the settlement, Gemini has agreed to cooperate with the NYAG’s investigations into Genesis parent company Digital Currency Group (DCG), DCG CEO Barry Silbert, and former Genesis CEO Soichiro Moro. Additionally, Gemini has committed to making the final distribution of funds available to users within seven days. This distribution will return the remaining 3% of crypto assets owed to users when the Earn program was suspended.
Gemini previously returned over $2 billion in crypto to customer accounts on May 29, fulfilling 97% of the funds owed to customers. The distributions were made in-kind, meaning that users received the same amount of cryptocurrency they had initially lent to the program. The completion of this settlement represents a significant step towards resolving the issues caused by the Gemini Earn program’s closure.
Overall, this settlement highlights the importance of transparency and accountability in the cryptocurrency industry. Users can now expect to receive the funds they are owed, providing some relief and closure in a challenging situation. Moving forward, it will be crucial for exchanges and lending programs to prioritize investor protection and ensure that accurate information is provided to all users.