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Gemini will pay $50 million to defrauded investors
Gemini will make this payment as compensation for a crypto fraud claim in New York. Gemini is also prohibited from operating loan programs in New York.
Letitia James, New York Attorney General, announced that his office successfully received $50 million from the crypto platform Twins. This money will be used to reimburse investors who have joined the Gemini Earn program.
The lawsuit states so Gemini deceived investors on over 3 billion dollars. He points to internal Gemini documents to argue that the exchange was aware of the “high risk” of the program.
“Hundreds of thousands of people, including at least 29,000 New Yorkers, saw their trust betrayed and their money swindled by Gemini through its fake Earn program,” said Attorney General James. “Gemini marketed its Earn program as a way for investors to grow their money, but in reality it lied and locked investors out of their accounts. Today’s settlement will save defrauded investors and should remind cryptocurrency companies that deceiving investors is illegal and will not be tolerated by my office.”
Gemini will refund $50 million in digital assets to Gemini Earn investors who were unable to access their accounts. These will be recoveries for over 230,000 Earn investors. No action is required from investors to recover their digital assets.
Background
Gemini Earn offered attractive interest rates to investors who lent cryptocurrencies to Genesis Global Capital, a unit of Digital Currency Group. Gemini charged agent commissions in excess of 4% for this service.
In November 2022, Genesis suspended refunds following the collapse of the FTX cryptocurrency exchange. Subsequently, Genesis filed for Chapter 11 bankruptcy, leaving investors scrambling for their investments.
Gemini is run by the billionaire twin brothers Cameron and Tyler Winklevoss.