The New York Attorney General’s office announced on June 14 that it has finalized a settlement with Gemini, resulting in the recovery of $50 million for users of the defunct Gemini Earn program. This settlement comes after legal charges were filed against Gemini by the NYAG and prohibits the exchange from offering crypto lending programs in New York.
Gemini users impacted by the failure of the Gemini Earn program will receive the recovered funds in their accounts automatically, without the need for any further action on their part. It is reported that over 230,000 users were affected by the program’s collapse, including approximately 29,000 residents of New York. The NYAG accused Gemini of misleading investors about the risks associated with the program, ultimately locking them out of their accounts.
New York Attorney General Letitia James stated that Gemini marketed the Earn program as a way for investors to grow their money, but in reality, the exchange deceived investors and prevented them from accessing their accounts.
Gemini confirmed the settlement on the same day it was announced and pledged to distribute the final funds owed to users within seven days. This distribution will cover the remaining 3% of crypto that was owed to users when the Earn program was suspended.
In May, Gemini returned over $2 billion in crypto to customer accounts, completing 97% of the owed funds. The distributions were made in-kind, meaning that users received the same cryptocurrency they had initially lent to the program.
Gemini also disclosed that as part of the settlement, it will be cooperating with the NYAG’s investigations involving Genesis parent company Digital Currency Group (DCG), DCG CEO Barry Silbert, and former Genesis CEO Soichiro Moro.
