Gemini to Return $1.1 Billion and Pay Fine in Regulatory Settlement
Gemini’s Regulatory Settlement
Gemini, a cryptocurrency exchange, has agreed to return over $1.1 billion to customers and pay a $37 million fine to settle charges of unsafe practices with the New York Department of Financial Services (NYDFS). The settlement follows the collapse of Gemini’s Earn program, operated in partnership with Genesis Global Capital, during a crypto market crash in November 2022.
Customer Reimbursement
The resolution means that customers affected by the Earn program closure will be closer to recovering their funds. NYDFS retains the right to take further action if Gemini fails to fulfill its commitment to returning at least $1.1 billion to customers post-Genesis’ bankruptcy resolution. Gemini has also pledged $40 million to aid in concluding Genesis’ bankruptcy to benefit Earn customers.
Background and Partnership
Gemini, founded by the Winklevoss twins, had partnered with Genesis in 2020 to offer customers the opportunity to earn interest by lending their crypto assets. However, NYDFS alleged that Gemini did not adequately oversee Genesis, leading to the program’s failure and subsequent legal disputes.
NYDFS Statement
NYDFS Superintendent Adrienne Harris criticized Gemini for its lack of due diligence, resulting in harm to Earn customers due to Genesis’ financial collapse. The settlement is seen as a victory for affected customers, ensuring they receive their entrusted assets back.
Gemini’s Response
Gemini expressed gratitude towards NYDFS for their role in achieving a recovery for Earn users. The exchange mentioned its efforts over the past year to advocate for customers and facilitate the return of their assets.
In conclusion, the settlement between Gemini and NYDFS marks a significant step towards resolving the aftermath of the Earn program’s termination and provides affected customers with hope for the return of their funds.
