Sunday, February 9, 2025
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Gemini crypto exchange settles, to refund $1.1B to customers

New York: Cryptocurrency exchange Gemini has reached a settlement with the New York Department of Financial Services (NYDFS) to refund at least $1.1 billion to customers affected by its defunct Earn program. The program, conducted in collaboration with crypto lender Genesis Global Capital, was suspended amid the crypto market crash in November 2022, leading to significant financial challenges for Genesis.

As part of the settlement, Gemini will also pay a $37 million fine for what NYDFS has termed as “unsafe and unsound practices.” The Gemini Earn program allowed customers to lend their crypto assets to Genesis in exchange for earning interest. However, the sudden suspension during the market downturn led to the filing of bankruptcy by Genesis and ensuing legal disputes among Genesis, Gemini, and Genesis’s parent company, Digital Currency Group.

The agreement signals a step forward for Gemini’s Earn customers, who have been unable to access their funds since late 2022. The NYDFS highlighted that it retains the authority to take further action against Gemini if the company fails to fulfill its commitment to refund at least $1.1 billion after resolving Genesis’s bankruptcy proceedings.

Crypto Exchange To Refund $1.1 Billion To Customers Locked Out Since 2022

Gemini, founded by Cameron and Tyler Winklevoss, popularly known as the Winklevoss twins, gained national attention for their legal battles against Meta Platforms’ CEO Mark Zuckerberg. The company had previously filed a lawsuit against Digital Currency Group over the collapse of their joint crypto lending partnership.

NYDFS accused Gemini of neglecting due diligence on Genesis and failing to monitor the crypto lender during the Earn program’s duration. The regulatory authority also asserted that Gemini did not maintain adequate reserves, leading to financial repercussions for Earn customers.

NYDFS Superintendent Adrienne Harris emphasized, “Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown. Today’s settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini.

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