8 months ago
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Customers of Gemini’s Earn Program will be able to recover their assets thanks to a new ruling.
It is no secret that while many crypto-focused companies are successful, they frequently butt heads with regulators around the world. From the endless lawsuits the SEC has filed against companies in the space to the suspicion that they still operate under, this does not look to be changing. Case in point, popular crypto exchange Gemini has agreed to pay a fine to the tune of $1.1 billion. This was ordered by the New York State Department of Financial Services and pertains to the activities of its Earn Program.
Gemini Comes to Settlement
This saga began in 2021 when Gemini launched Gemini Earn, a program that allowed its users to loan their crypto to Genesis Global Capital LLC. In return, they could earn interest of up to 7.4% APY.
Unfortunately, Genesis Global Capital, LLC has since declared bankruptcy and this put Gemini in a tight legal spot. The NYSDFS now says that Gemini did not do its due diligence and exposed its customers to the company and when it went bust, they were unable to retrieve their assets. It is estimated that the program had about 200,000 members, including 30,000 residing in New York.
But with this ruling, they should have some respite. Gemini, on its part, has said that it is committed to helping customers recover their funds.
“Gemini commits to working through the bankruptcy process to ensure that Earn Customers make a full recovery of their virtual currency,” a statement from the company says.
It further explains that should this ruling be approved by the bankruptcy court, all Gemini Earn customers will get 100% of their funds back. The NYSDFS has also said that if Gemini does not distribute the funds, it reserves the right to bring future legal action against them. As Genesis Global Capital, LLC’s bankruptcy proceedings continue, Gemini has been ordered to contribute $40 million towards them.
Gemini’s Legal Issues
While there is some sort of resolution regarding the Earn Program, this is not the only legal drama that has followed it. A month ago, Gemini settled a lawsuit brought forward by the SEC. That lawsuit alleged that the Earn Program was dealing in unregistered securities and that Gemini was not liquid enough to meet withdrawal expectations. The settlement included a fine of $21 million from Gemini.
Gemini, along with Genesis Global Holdco and its parent company Digital Currency Group, faced another lawsuit. That one was from the New York Attorney General’s Office and accused Gemini of defrauding its customers. It was settled earlier this month, with Gemini agreeing to settle its creditors.
With these three lawsuits seemingly settled, the end of Gemini’s Earn Program woes appears to be on the horizon.
