Gemini Repays $50 Million to Investors in New York Fraud Suit
New York Attorney General Letitia James has successfully recovered $50 million from the cryptocurrency platform Gemini Trust to reimburse investors affected by its Gemini Earn program, she announced on Friday, according to Reuters.
Gemini Trust, led by Cameron and Tyler Winklevoss, has committed to fully compensating over 230,000 investors in the Earn program, including 29,000 from New York. As part of the settlement, Gemini has agreed to cease operating crypto lending programs in the state.
This payout follows James’ earlier $2 billion settlement with crypto lender Genesis Global Capital, announced in May. James criticized Gemini for misleading investors about the Earn program’s benefits, which resulted in account access restrictions. She stated that the settlement ensures affected investors are fully compensated.
Gemini informed investors that the funds will be available within seven days. “With this final distribution, Earn users will have received 100% of the assets owed to them,” the company confirmed.
Gemini Earn had promised attractive interest rates to investors who lent cryptocurrencies like bitcoin to Genesis, a unit of Digital Currency Group, with Gemini earning fees that sometimes exceeded 4%. Over $1 billion became inaccessible when Genesis suspended redemptions in November 2022, following the collapse of the FTX cryptocurrency exchange.
Gemini did not admit wrongdoing but agreed to settle. Earlier, in February, New York’s top financial regulator fined Gemini $37 million for compliance shortcomings.
Investors are likely to receive more than their initial investments as they are being compensated with digital assets like bitcoin, whose value has significantly increased since redemptions were halted. Additionally, Gemini has agreed to assist in Attorney General Letitia James’ fraud lawsuit filed in October against Digital Currency Group and its CEO Barry Silbert. Digital Currency Group has refuted these allegations as unfounded.
