Gemini reaches settlement with New York Attorney General agrees to a 50 million payment

Gemini Resolves Dispute with New York Attorney General, Commits to $50 Million Settlement


Ruholamin Haqshanas
Updated:
June 17, 2024 05:50 EDT
|
2 min read


In a recent development, cryptocurrency exchange Gemini has come to an agreement with the New York Attorney General (NYAG) to pay $50 million in digital assets to participants of its Gemini Earn initiative.
The settlement stems from accusations by NYAG Letitia James that Gemini deceived numerous investors, including those from New York, about the risks involved in the program, as per an official statement.
Gemini Earn allowed users to loan their digital currencies to Genesis Global Capital, LLC, with the promise of earning up to a 7.4 percent annual percentage yield (APY).
However, according to the NYAG, Gemini falsely promoted the initiative and prevented investors from accessing their accounts.
“Gemini portrayed its Earn program as a means for investors to increase their funds, but in reality, misled them and restricted access to their accounts,” stated Letitia James.
Full Reimbursement for All Gemini Investors
As part of the settlement, all investors who were unable to retrieve their funds when the program collapsed will receive full reimbursement of their initial investments.
Furthermore, Gemini is prohibited from offering any cryptocurrency lending programs in New York.
The NYAG initially filed a lawsuit in October against Gemini, Genesis, and Digital Currency Group (DCG), alleging that Gemini deceived investors and provided false assurances about the low risks associated with investing in the Earn program through Genesis.
The NYAG also accused DCG, Genesis, and two executives of concealing $1.1 billion in losses through a series of misrepresentations and omissions.
Gemini recently announced that Earn participants would receive their cryptocurrencies valued at $2.18 billion in-kind, meaning they would be refunded with the same digital assets they had initially invested.
According to Gemini, these distributions signify a 232% recovery from the time withdrawals were halted in November 2022.
Gemini assured customers that the final Earn distributions would be deposited into their accounts within a week.
Gemini to Disburse Over $2 Billion Among Earn Users
In late May, Gemini made an announcement regarding the complete reimbursement of digital assets for its Earn program participants.
The reimbursement plan includes a $1.1 billion settlement, ensuring that users will receive the full value of their assets, potentially exceeding the initial amount due to asset appreciation during the holding period.
The distributions also represent a 232% recovery from when withdrawals were suspended in November 2022.
Gemini introduced an optional program called Earn, where users could lend their cryptocurrency holdings to the company for interest.
Launched in early 2021 in partnership with Genesis, the program pledged a 7.4% return on deposits.
However, Gemini had to terminate Earn in January 2023 after Genesis failed to repay over $900 million in assets owed to Gemini.
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