On Friday, cryptocurrency exchange Gemini agreed to pay investors in its Gemini Earn program $500,000 worth of digital assets as part of a settlement with the New York Attorney General (NYAG).
The settlement resolves allegations that Gemini misled thousands of investors, including New York residents, about the risks associated with the program. New York State Attorney General Letitia James stated that Gemini promoted the Gemini Earn program as a safe investment opportunity to deceive investors and conceal the true risks. The program allowed customers to lend cryptocurrency to the now-bankrupt Genesis Global Capital, LLC, with promised returns of up to 7.4%.
James emphasized that the agreement ensures “full restitution to all defrauded investors who invested in the Earn program but were unable to withdraw their assets when the investment collapsed.” Additionally, the agreement prohibits Gemini from conducting any cryptocurrency lending programs within the state of New York.
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In January, the New York Attorney General’s office filed complaints against Gemini, cryptocurrency lending company Genesis, and cryptocurrency investment firm DCG. The complaints alleged that Gemini falsely assured investors of lower risks in investing in the Earn through Genesis program. It further accused DCG and Genesis, as well as two executives, of “concealing losses of billions of dollars through months of misrepresentations, omissions, and concealment.”
Gemini released a statement stating that $218 million will be allocated to Earn users. This will result in a 23% payout of suspended withdrawal amounts for the year 2022.
According to Gemini’s statement, the final distribution will be deposited into customer accounts within 7 days. Gemini expressed satisfaction with the agreement in the statement, saying, “We are pleased to offer you a full refund and thank you for your patience and continued support throughout the process.”
