Completion of Settlement and Fund Recovery
The New York Attorney General’s (NYAG) office announced on June 14 that it successfully settled with Gemini. This agreement recovered $50 million for users of the now-defunct Gemini Earn program. Users will automatically receive the recovered crypto in their accounts without taking any further action.
Legal Resolution and Operational Barriers
This settlement resolves the legal charges the NYAG filed against Gemini. It prohibits Gemini from operating crypto lending programs within New York. Additionally, Gemini must assist in the NYAG’s ongoing investigations into Genesis’s parent company, Digital Currency Group (DCG), DCG CEO Barry Silbert, and former Genesis CEO Soichiro Moro.
Allegations and User Impact
According to the NYAG, Gemini allegedly misled thousands of investors about the risks associated with the Gemini Earn program. The collapse of Gemini Earn affected more than 230,000 users, including at least 29,000 residents of New York.
Statement from the New York Attorney General
New York Attorney General Letitia James stated, “Gemini marketed its Earn program as a way for investors to grow their money, but actually lied and locked investors out of their accounts.”
Final Distribution within a Week
On the same day, Gemini confirmed the settlement. The company announced it would make the final distribution of funds to users within seven days. This action will return the remaining 3% of crypto owed to users since the suspension of the Earn program.
Conclusion of the NYAG’s Lawsuit
Gemini expressed satisfaction with the conclusion of the lawsuit. The company stated, “We are also pleased to announce that … Gemini has entered into an agreement with the New York Attorney General (NYAG) to settle the lawsuit the NYAG brought against Gemini on October 19, 2023.”
Return of Customer Funds
Previously, on May 29, Gemini returned over $2 billion in crypto to customer accounts. This completed the return of 97% of the owed funds. The distributions were made in-kind, meaning users who lent one Bitcoin to the program received one Bitcoin back.
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