Gemini agrees to a $50 million settlement with NYAG for misleading 230,000 investors in its Gemini Earn program.
The NYAG lawsuit revealed Gemini misled investors about risks and concealed loan concentration with Alameda Research.
Settlement bans Gemini from cryptocurrency lending in New York; affected investors can recover their investments.
The New York Attorney General (NYAG) has reached a settlement with cryptocurrency exchange Gemini in the amount of $50 million for allegedly deceiving investors.
We recovered $50 million from cryptocurrency platform @Gemini for defrauding hundreds of thousands of investors. Everyone that Gemini deceived will get their money back. https://t.co/tfQf1wxijE
— NY AG James (@NewYorkStateAG) June 14, 2024
According to New York Attorney General Letitia James, the cryptocurrency exchange defrauded investors out of money they invested into the Gemini Earn program. Complaints were raised about the program when withdrawals were stopped in November 2022.
Gemini enticed investors to lend their cryptocurrency holdings to the now-bankrupt Genesis Global Capital by pitching its Gemini Earn program as a low-risk investment. The business is accused of misleading investors about the safety and security of their investments while making large return guarantees.
The NYAG’s office discovered that the loans were heavily linked with Sam Bankman-Fried’s Alameda Research, a fact that was not disclosed to investors. In October 2023, Attorney General James filed a lawsuit against Gemini, claiming that the company had intentionally downplayed the program’s risks.
Gemini has been banned from operating any cryptocurrency lending programs in New York as a result of the settlement. More than 230,000 investors were defrauded by the company when they made investments in the Gemini Earn scheme. The settlement allows these investors to recover the funds they were unable to withdraw when the program failed.
‘Final Earn distributions’ will be accessible in customer accounts within seven days, according to Gemini. AG James underlined that the goal of the current settlement is to compensate investors who were defrauded. Additionally, she warned other cryptocurrency firms that her office will not accept investor deception.
Gemini and the NYAG’s $50 million settlement serves as a clear reminder to cryptocurrency companies about the legal consequences of defrauding investors. As efforts to protect investors and maintain the integrity of the cryptocurrency market continue, AG James has continued to encourage New Yorkers who have been scammed by cryptocurrency companies to report the incidents to the Office of the Attorney General.
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