Gemini Settles $50M Crypto Fraud Case in New York

Gemini 50 million crypto fraud
Gemini has agreed to pay $50 million to resolve allegations of crypto fraud in New York. This settlement stems from claims that Gemini misled investors through its Earn program, promising growth opportunities while allegedly withholding access to accounts.

New York Attorney General Letitia James announced the agreement, emphasizing that Gemini’s actions affected numerous investors, including 29,000 in New York.

The lawsuit, citing internal documents, argues that Gemini was aware of significant risks associated with the Earn program, which allegedly deceived investors out of more than $3 billion. Attorney General James condemned Gemini’s conduct, stating, “Hundreds of thousands of people had their trust betrayed and money taken by Gemini’s deceptive Earn program.”

In the settlement, Gemini will refund $50 million in digital assets to over 230,000 investors who couldn’t access their Earn accounts. Investors don’t need to take any action for the reimbursement.

Gemini Earn had offered appealing interest rates to investors who loaned crypto to Genesis Global Capital, a subsidiary of Digital Currency Group. Gemini charged agent fees exceeding 4% for these transactions.

The program faced complications when Genesis suspended redemptions following issues at the FTX cryptocurrency exchange in November 2022. Genesis subsequently filed for Chapter 11 bankruptcy, leaving investors in uncertainty.

Gemini, founded and operated by Cameron and Tyler Winklevoss, billionaire twin brothers, also agreed to cease operating lending programs in New York as part of the settlement.

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