Prominent cryptocurrency network Gemini has promised to pay $50 million as a settlement for a claim on New York cryptocurrency fraud. New York Attorney General Letitia James declared this settlement, which also prevents Gemini from running any loan projects within the state.
Attorney General James claims her government successfully acquired the $50 million from Gemini, which will be used to reimburse investors duped by the Gemini Earn fraud. Based on internal records displaying the known “high risk” associated with the project, the complaint charges Gemini deceived investors out of over $3 billion.
“Hundreds of thousands of people, including at least 29,000 New Yorkers, had their money swindled and their trust betrayed by Gemini through its bogus Earn program,” Attorney General James said.
Gemini marketed its Earn program to generate revenue for investors without keeping them out of their accounts. Today’s settlement will make misled investors whole and should be a message to cryptocurrency companies that my office regards as illegal and unethical deception of investors.
Gemini Earners To Receive $50 Million In Digital Assets
Under part of the settlement, Gemini Earners who could not access their accounts would get $50 million in digital asset back-off. More than 230,000 Earners will receive this money without needing to act to retrieve their digital assets.
Gemini Earn presented investors funding their cryptocurrencies to Genesis Global Capital, a division of Digital Currency Group, appealing interest rates. Gemini charged above 4% agency fees to cover these loans. However, the program suffered greatly when Genesis ceased redemptions after the FTX Bitcoin exchange collapsed in November 2022. After this episode, Genesis became Chapter 11 bankrupt, leaving many investors fighting to recover funds.
