- New York Attorney General recovers $50 million in settlement with crypto exchange Gemini
- Gemini also banned from operating any crypto lending programs in New York
In a landmark decision, New York Attorney General Letitia James announced that the state has recovered $50 million from crypto exchange Gemini. This settlement aims to return funds to Gemini Earn customers who were misled about the risks associated with the investment scheme.
The recovered funds will be distributed to investors involved in a multi-firm bankruptcy proceeding, offering much-needed restitution to those affected.
Gemini, alongside Genesis Global Capital, had promoted the Gemini Earn program, enticing investors with promises of substantial returns.
However, the program’s inherent risks were not adequately disclosed, leading to significant financial losses for over 230,000 users. The settlement agreement stipulates that Gemini must fully reimburse the defrauded investors, ensuring they recover the assets they had invested.
As part of the settlement, Gemini is barred from operating any cryptocurrency lending programs in New York. The agreement also mandates Gemini’s cooperation with the Office of Attorney General’s (OAG) ongoing litigation against Digital Currency Group (DCG), its CEO Barry Silbert, and Genesis’ former CEO Soichiro Moro.
This move is aimed at holding all responsible parties accountable and further protecting investors from fraudulent practices in the cryptocurrency sector.
According to the consent judgment disclosed on June 14, Gemini is required to make complete restitution to the Earn Investors on a “coin-for-coin” basis within seven days of the execution of the stipulation.
Attorney General Letitia James emphasized the significance of this settlement in her statement:
“Gemini marketed its Earn program as a way for investors to grow their money, but actually lied and locked investors out of their accounts. Today’s settlement will make defrauded investors whole and should remind cryptocurrency companies that deceiving investors is illegal and will not be tolerated by my office.”
This settlement follows James’ related $2 billion agreement with crypto lender Genesis Global Capital, announced on May 20, underscoring the ongoing efforts to bring justice to affected investors.
The funds from Gemini will be accessible within seven days, with Gemini assuring investors that this final distribution will ensure they receive 100% of the assets owed to them.
As Attorney General James highlighted, “This settlement will make defrauded investors whole and should remind cryptocurrency companies that deceiving investors is illegal and will not be tolerated by my office.”
The crypto industry, grappling with increased regulatory scrutiny, must take heed of this development. The case against Gemini and its executives sets a precedent for how regulators will address misconduct and protect investors moving forward.
