Crypto exchange Gemini has agreed to a $50 million settlement to resolve fraud claims, following a crackdown on crypto lending programs in New York. The lawsuit, filed by New York Attorney General Letitia James, accused Gemini of misleading over 230,000 users of its Gemini Earn program. The company will pay about $50 million to affected users in the same type and amount of cryptocurrencies originally loaned.
In addition to the financial settlement, Gemini is banned from operating any crypto lending programs in New York. If future legislation permits such activities, Gemini would need the approval of the Office of the Attorney General (OAG) to resume these operations.
The settlement has significant implications for Gemini and its users. Affected Earn users can expect to receive 100% of their assets within seven days. The settlement also sends a strong message to other crypto companies about the importance of transparency and honesty in their dealings.
Gemini cooperates with the OAG in ongoing litigation against Digital Currency Group (DCG) and its CEO Barry Silbert. This cooperation is part of a broader effort to address fraudulent practices within the cryptocurrency industry. The OAG’s actions highlight the importance of regulatory oversight in maintaining the integrity of financial markets.