The New York Attorney General’s office recently announced the resolution of its 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, alleging that the exchange misled thousands of investors on the risks associated with the Gemini Earn program with Genesis Global Capital. As a result of the settlement, Gemini is now prohibited from operating crypto lending programs in New York.
The failure of the Gemini Earn program reportedly impacted over 230,000 users, including at least 29,000 residents of New York. Users will now finally receive the crypto in their accounts without any further action required on their part. This is a crucial development for those who were locked out of their accounts and had been awaiting the return of their funds.
New York Attorney General Letitia James highlighted Gemini’s deceptive marketing of the Earn program, stating that it was portrayed as a way for investors to grow their money when, in reality, investors were misled and subsequently locked out of their accounts. On the other hand, Gemini confirmed the settlement and expressed its commitment to making the final distribution of funds available to users within the next seven days.
Gemini had already returned more than $2 billion in crypto to customer accounts prior to this settlement, completing the return of 97% of the funds owed to customers. The distributions were made in-kind, ensuring that users received the same amount of crypto that they had originally lent to the program.
The fallout of Gemini’s settlement with the NYAG sheds light on the importance of transparency and accountability in the crypto industry. The legal charges and subsequent resolution serve as a reminder to all exchanges and platforms to prioritize the protection and fair treatment of their users. The recovery of $50 million for impacted users marks a step towards restitution, but also underscores the potential risks and pitfalls associated with crypto investments. It is imperative for companies in the industry to uphold ethical practices and ensure that investors are adequately informed and protected at all times.