Recently, the New York Attorney General’s office finalized its settlement with Gemini, a cryptocurrency exchange platform, resulting in the recovery of $50 million for users affected by the defunct Gemini Earn program. This settlement was reached on June 14, and it signifies an important step in addressing the legal charges brought against Gemini by the NYAG. As part of the agreement, Gemini is prohibited from operating crypto lending programs in New York and is required to assist in the investigations of related parties.
The failure of the Gemini Earn program had a significant impact on over 230,000 users, including approximately 29,000 residents of New York. These users were allegedly misled by Gemini regarding the risks involved in the program, leading to financial losses and restricted access to their accounts. New York Attorney General Letitia James emphasized that Gemini marketed the Earn program as a means for investors to grow their assets, but in reality, it resulted in deception and account lockouts for participants.
Gemini has confirmed its acceptance of the settlement and will be dispersing the recovered $50 million to users promptly. The process has been streamlined to ensure that users do not need to take any additional steps to receive their share of the settlement funds. This action will also facilitate the return of the final 3% of cryptocurrency owed to users from the suspended Earn program, bringing closure to this chapter for affected individuals.
Prior to the recent settlement, Gemini had already returned over $2 billion in cryptocurrency to customers on May 29, demonstrating a commitment to resolving outstanding issues related to the Earn program. The distributions were made in-kind, ensuring that users received the same amount of cryptocurrency they had initially contributed to the program. Despite these efforts, the legal proceedings initiated by the NYAG have underscored the need for greater transparency and accountability within the cryptocurrency industry.
The settlement between Gemini and the New York Attorney General represents a significant turning point for the affected users of the defunct Gemini Earn program. While the recovery of $50 million is a positive development, it also serves as a reminder of the potential risks and challenges associated with crypto lending programs. Moving forward, it is essential for cryptocurrency platforms to prioritize investor protection and regulatory compliance to prevent similar incidents in the future.