Gemini to Refund at Least $1.1 Billion to Customers

Gemini, the cryptocurrency exchange founded by Tyler and Cameron Winklevoss, has reached a settlement with the New York Department of Financial Services (NYDFS) to refund at least $1.1 billion to customers affected by its defunct lending program. In addition to the reimbursement, Gemini will pay a $37 million fine for what the NYDFS termed as "significant failures."

Gemini's Earn program was abruptly halted during a cryptocurrency market crash in November 2022. The NYDFS asserted that Gemini neglected due diligence on an unregulated third party, accused later of substantial fraud.

This failure harmed Earn customers who were unable to access their assets after the financial troubles of Genesis Global Capital, the partner in the lending program.

NYDFS Superintendent Adrienne Harris stated, "Today's settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini."

The department warned of potential further actions against Gemini if the company failed to return the specified amount to customers.

Gemini, in response, expressed its dedication to advocating for Earn users and securing the return of their assets.

The company committed to contributing $40 million towards concluding Genesis' bankruptcy proceedings, aiming to benefit Earn customers affected by the program's closure.

The Earn program, conducted in collaboration with Genesis Global Capital, faced suspension in November 2022, followed by Genesis filing for bankruptcy.

The aftermath led to protracted legal battles involving Genesis, Gemini, and Genesis' parent company, Digital Currency Group.

Gemini customers participating in the Earn program have been unable to access their funds since late 2022. The recent settlement marks a step forward in the process of returning their assets.

Gemini, led by the Winklevoss twins, is also known for its prolonged legal dispute with Facebook and its CEO, Mark Zuckerberg.

In a separate development in January 2023, both Gemini and Genesis faced charges from US regulators for the alleged illegal sale of crypto assets to hundreds of thousands of investors.

The accusations revolved around the offering and sale of products through the Earn program, which commenced in 2021. The case is under the jurisdiction of the US Securities and Exchange Commission.