The New York Attorney General’s Office announced that it has reached a settlement of approximately $50 million in a high-stakes lawsuit with multiple defendants, including cryptocurrency exchange Gemini Trust Company, LLC (Gemini) and its former business partner Genesis Global Capital. The settlement marks the latest development in the legal dispute involving the parties.
Gemini banned from operating crypto lending program
In a press release last Friday, New York Attorney General Letitia James announced that $50 million had been successfully recovered to compensate victims who suffered financial losses from Gemini's popular money-making scheme. This action marks substantial progress in the investigation of Gemini and its related schemes and brings a certain level of compensation to affected investors.
James revealed that more than 230,000 investors, including 29,000 New York residents, were deceived into investing in Gemini's Earn, an investment program operated in partnership with the now-defunct cryptocurrency lender Genesis Global. The Attorney General noted that these investors were unknowingly drawn into this risky investment scheme.
Misleading Practices of the Gemini Earn Program
Attorney General Letitia James stressed that Gemini's Earn program seriously damaged the trust of hundreds of thousands of investors, including at least 29,000 New York residents. She pointed out that Gemini promoted the program as a means to help investors increase the value of their funds, but in fact it misled the public and subsequently blocked investors' accounts, resulting in the funds being defrauded. This behavior not only violated investors' trust, but also violated legal provisions.
The collapse of the Gemini Earn program following Genesis Global Capital’s bankruptcy filing in November 2022 left investors without access to their assets valued at more than $900 million.
Subsequently, in October 2023, the New York Attorney General’s Office took legal action, filing a lawsuit against Gemini, Genesis, and its parent company Digital Currency Group (DCG), along with DCG’s CEO Barry Silbert and Genesis’ former head Saichiro Moro, to hold them accountable for their involvement in the incident.
Legal Actions and Settlements
In addition to Gemini’s recent payment, the lawsuit also resulted in a $2 billion settlement with Genesis, the largest amount ever given by a state government to a cryptocurrency company. As part of the agreement, Gemini was also banned from operating any cryptocurrency lending company in New York. In addition, the exchange must assist the New York Attorney General in his lawsuit against other defendants.
Commenting on the recent settlement victory, Letitia James emphasized that this settlement will ensure that those defrauded investors receive the compensation they deserve. She clearly warned all cryptocurrency companies that any behavior that deceives investors is illegal and her office will not tolerate such behavior.
She further pointed out that in the past few years, she has made remarkable achievements in regulatory enforcement in the field of cryptocurrency, especially filing lawsuits against companies such as KuCoin and Nexo that were suspected of violations, and successfully obtained settlements of US$22 million and US$24 million, which demonstrated her firm commitment to maintaining market order and protecting the rights and interests of investors. #Gemini #和解 #法律纠纷
In the latest market dynamics, the cryptocurrency market fell 1.05% in the latest day, causing its total market value to shrink to approximately $2.4 trillion. Bitcoin continues to top the cryptocurrency market with a market value of $1.4 trillion. Ethereum, as the second largest digital asset, has a market value of $445.27 billion, accounting for 18% of the entire cryptocurrency market share.
Conclusion:
The settlement between Gemini and the New York Attorney General's Office not only provides necessary compensation to the harmed investors, but also sends a strong signal to the entire cryptocurrency industry: regulators will strictly crack down on dishonest behavior and protect the rights and interests of investors.
At the same time, Letitia James' firm stance and actions show that any violation of the law and damage to investors' trust will be severely punished by law. As the cryptocurrency industry continues to develop, reasonable supervision and industry self-discipline will be the key to ensuring its healthy growth.