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IPFS News Link • New York

Gemini Agrees to Over $1 Billion Restoration in Settlement With New York Regulators

• https://news.bitcoin.com, by Jamie Redman

The settlement, which also includes a $37 million fine, comes as a significant development for the exchange amidst several ongoing legal challenges with big-name crypto firms and heightened regulatory scrutiny.

Gemini Commits to $1 Billion Customer Payback in NYDFS Consent Order
Gemini's recent settlement with the NYDFS marks a critical juncture for the exchange, following allegations of inadequate due diligence and misleading representations in its Earn program. Launched to offer customers up to 13% yield on lent cryptocurrencies, the program faced a dire setback as its sole counterparty, Genesis Global Capital, faltered amid the 2022 market downturn, freezing assets worth over $1.7 billion.

The consent order states:

"The department found, notwithstanding Gemini's public statements to the contrary, [Genesis Global Capital] was not fully vetted nor sufficiently monitored by Gemini; and in November 2022, [Genesis Global Capital] defaulted on approximately $940 million worth of loans made by Earn Customers."

NYDFS Superintendent Adrienne A. Harris underscored the gravity of Gemini's oversight, stating, "Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown."


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