Customers have not been able to access funds since the end of 2022.
Cryptocurrency exchange Gemini will return at least $1.1 billion to customers of its dormant loan program and pay a $37 million fine for unsafe and unfair practices under a settlement with the New York Department of Financial Services, the regulator said on Wednesday.
Gemini’s Earn program, which was offered in partnership with crypto lender Genesis Global Capital, was halted during a crypto market crash in November 2022. That disarray caused Genesis to file for bankruptcy, and led to extensive litigation between Genesis, Gemini, and Genesis’ parent company. , digital currency group.
the take
The agreement means Gemini Earn customers who have not been able to access funds held in those accounts since the end of 2022 are one step closer to regaining access to their money.
The NYDFS said Wednesday it reserves the right to take further action against Gemini if the company does not meet its obligation to return at least $1.1 billion to customers following the resolution of Genesis’ bankruptcy.
Context
Gemini is run by Cameron and Tyler Winklevoss – also known as the Winklevoss twins, who gained national attention for their legal battle against Meta Platform CEO Mark Zuckerberg. The company had previously sued DCG over the failure of its joint crypto lending partnership.
The two companies partnered in December 2020 to give Gemini customers the opportunity to lend their crypto assets to Genesis in exchange for earning interest, ultimately collecting billions of dollars worth of crypto assets from investors.
The NYDFS claimed that Gemini failed to monitor and conduct due diligence on Genesis throughout the lifetime of the Earn program and failed to maintain adequate reserves.
key quote
“Gemini failed to conduct due diligence on an unregulated third party that was later charged with large-scale fraud, harming Earn clients who were part of Genesis Global Capital,” NYDFS Superintendent Adrienne Harris said in a statement. They were suddenly unable to access their assets after experiencing a financial meltdown.” “Today’s settlement is a victory for Earn customers who have rights to the assets entrusted to Gemini.”
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
Follow us on Google news ,Twitter , and Join Whatsapp Group of thelocalreport.in
