
Gemini fine overview:
- Who: Cryptocurrency exchange Gemini Trust Co. LLC has reached a settlement with the New York State Department of Financial Services.
- Why: A New York DFS investigation reportedly found Gemini failed to adequately vet and monitor a third-party company that ultimately declared bankruptcy, which resulted in Gemini Earn program customers losing money.
- Where: The Gemini lawsuit was filed before the New York DFS.
Cryptocurrency exchange Gemini Trust Co. LLC will pay a $37 million fine and reimburse Gemini Earn users for the losses they experienced when the company’s partner, Genesis Global, declared bankruptcy, Law360 reports.
The New York State Department of Financial Services (DFS) recently announced the Gemini Earn settlement and Gemini’s commitment to returning more than $1 billion to consumers who used its Gemini Earn lending product. Gemini will reportedly also pay $40 million into the Genesis bankruptcy to reimburse Earn users.
Gemini also reportedly announced a separate settlement in the Genesis bankruptcy proceedings that could 100% reimburse Earn users’ crypto.
“If approved, we will be returning over $1.8 billion in value (at today’s prices) — $700 million more than when Genesis halted withdrawals on November 16, 2022,” Gemini said in an announcement of the Earn settlement.
Gemini fine imposed for ‘significant failures’ that threatened company, New York DFS says
The New York DFS said its investigation into Gemini “found compliance, management and internal audit issues at the company including, among other weaknesses, with respect to Gemini’s involvement and oversight of the Gemini Earn program, an unsecured lending program.”
The consent order explains the program allows customers to loan their virtual currency to a third party and receive interest in return.
The New York DFS says Gemini did not fully vet or adequately monitor Genesis, the third party the company selected. In November 2022, Genesis reportedly defaulted on about $940 million worth of loans made by Earn customers. Genesis subsequently declared bankruptcy in January 2023, leaving more than 200,000 Earn customers without access to their virtual currency, the consent order states.
The $37 million Gemini Earn fine was reportedly imposed “for significant failures that threatened the safety and soundness of the company.”
Last fall, New York Attorney General Letitia James filed a lawsuit against Gemini and Genesis, claiming the firms lied about the Gemini Earn program and caused more than 232,000 individuals to suffer more than $1 billion in losses.
Were you a Gemini Earn customer? Tell us what you think about the Gemini fine in the comments.
The NYSDFS is represented by Madeline W. Murphy, John A. Nicosia, Alison L. Passer, Christopher B. Mulvihill and Samantha R. Darche.
The Gemini lawsuit is In the Matter of Gemini Trust Co. LLC before the New York State Department of Financial Services.
Don’t Miss Out!
Check out our list of Class Action Lawsuits and Class Action Settlements you may qualify to join!
Read About More Class Action Lawsuits & Class Action Settlements:
12 thoughts on$37M fine ordered for Gemini Earn losses
Hello
I fell for a scam broker, and lost a lot of money up to $150,000. I searched for a way to retrieve my lost money back and I got a recommendation of Expert Bernie Doran. Their expertise and professionalism in navigating the complex process were truly commendable. I have been able to recover all my lost crypto/funds and made $10,000 – $20,000 profits not just by buying the dip but implementing trades with signals supplied by Expert Mr Bernie Doran, I am glad he was able to recover my lost funds successfully . He can be reached on TELEGRAM – IEBINARYFX if you have similar issues.