Gemini assured affected Earn users that they would receive “100% of the assets owed to them” within seven days.
Gemini Trust, one of the leading crypto exchanges, has reached a $50 million settlement with the New York Attorney General’s office over allegations related to its Earn program.
The NY Attorney General’s office recently announced that the funds recovered will be refunded to investors in the Exchange’s Earn program.
The Earn program allows users to lend their crypto assets to institutional borrowers in exchange for interest payments.
Gemini’s $50 Million Settlement
NY Attorney General Letitia James announced a $50 million settlement with Gemini, resolving a lawsuit filed by her office in October 2023. The lawsuit accused Gemini of defrauding 230,000 investors, including New York residents, through its Earn program with Genesis Global Capital, failing to disclose the associated risks.
“Hundreds of thousands of people, including at least 29,000 New Yorkers, had their trust broken and their money swindled by Gemini through its bogus Earn program,” James said adding that “Gemini marketed its Earn program as a way for investors to grow their money but lied and locked investors out of their accounts.”
In May, the NY Attorney General’s office revealed a significant regulatory action with Genesis, mandating the firm to pay $2 billion to defrauded investors involved in the Earn program. AG James says these settlements apply solely to Genesis and Gemini. The lawsuit will continue against Digital Currency Group, its CEO Barry Silbert, and former Genesis CEO Soichiro Moro.
Gemini Banned from Operating Crypto Lending Program
The settlement prohibited Gemini from conducting any crypto lending programs in New York state. AG James mentioned on the X platform that “every individual deceived by Gemini will receive full restitution.” Gemini Trust stated that affected Earn program participants could anticipate receiving “100% of their owed assets” within seven days.
Since 2023, AG James’ office has been on the front lines of legal action against crypto firms allegedly operating unlawfully in New York. Lawsuits were filed against former Celsius CEO Alex Mashinsky and KuCoin. Mashinsky now faces criminal charges in the Southern District of New York, with his trial scheduled for January 2025.
