New York Recovers $50 Million From Gemini — Bans the Exchange From Crypto Lending in the State

New York Attorney General Letitia James has secured a $50 million settlement from cryptocurrency exchange Gemini for Earn program investors. This settlement ensures that all defrauded investors will fully recover the assets they invested but were unable to withdraw when the program collapsed. Additionally, Gemini is now banned from operating any crypto lending program in New York.

Gemini to Return Approximately $50 Million in Digital Assets to Earn Investors

New York Attorney General (NYAG) Letitia James’ office announced Friday that James has recovered approximately $50 million from the cryptocurrency platform Gemini Trust Company LLC “for more than 230,000 investors, including at least 29,000 New Yorkers, who invested in the Gemini Earn program and were defrauded.”

The announcement details, “Gemini allegedly misled thousands of investors on the risks associated with Gemini Earn, an investment program it offered with another cryptocurrency company, Genesis Global Capital (Genesis),” elaborating:

The settlement provides all defrauded investors full recovery of the assets they invested in the Earn program but were unable to withdraw when the investment program collapsed.

Friday’s settlement follows Attorney General James’ $2 billion agreement with Genesis and resolves claims against Gemini. The settlement “bans Gemini from operating any cryptocurrency lending program in New York,” the announcement explains, adding that it also mandates the crypto firm to cooperate with the Office of the Attorney General’s litigation against Digital Currency Group (DCG), Barry Silbert, and Genesis’ former CEO Soichiro Moro.

The New York Attorney General’s Office further noted:

Under today’s settlement, Gemini will return approximately $50 million worth of digital assets to Gemini Earn investors who were locked out of their accounts.

“Investors do not need to take any action to recover their digital assets and they will be able to access their digital assets in their accounts,” the announcement clarifies.

Attorney General James filed a lawsuit against Gemini in October of last year, accusing the company of misleading investors about the safety of its Gemini Earn program. Gemini had repeatedly assured investors that investing in the program with Genesis was low-risk. However, the lawsuit alleged that Gemini knew Genesis’ loans were under-secured and heavily concentrated with a single entity, Sam Bankman-Fried’s Alameda, but did not disclose these risks to investors. Last month, Attorney General James secured a $2 billion settlement from Genesis to compensate the defrauded victims.

What are your thoughts on Gemini’s settlement with New York Attorney General Letitia James? Also, what do you think about New York’s decision to ban Gemini from operating any cryptocurrency lending programs in the state? Share your opinions in the comments section below. #Write2Earn