Gemini has entered into a $50 million settlement with the New York Attorney General’s Office as part of an agreement to offer restitution to its defrauded users who were unable to reclaim their assets deposited into the Gemini Earn program. This settlement brings the lawsuit from October 2023 to a satisfactory conclusion.
Letitia James, the NY Attorney General, said in a press release, “Hundreds of thousands of people, including at least 29,000 New Yorkers, had their trust broken and their money swindled by Gemini through its bogus Earn program.” She continued, “Gemini marketed its Earn program as a way for investors to grow their money, but actually lied and locked investors out of their accounts. Today’s settlement will make defrauded investors whole and should remind cryptocurrency companies that deceiving investors is illegal and will not be tolerated by my office.”
Gemini has agreed to return defrauded investors all their assets within seven days by depositing them into their respective accounts. Investors can log back into the platform to access their funds. The program affected 230,000 users, including those living within and outside New York state. The company has also agreed not to operate any lending program in the state.
The basis of the lawsuit was that Gemini misled the program’s investors about the risks of the Earn program, therefore unfairly parting them away from their funds when the assets became inaccessible. The program was offered in collaboration with Genesis Capital Group (GCG). Letitia James successfully sued Genesis for $2 billion earlier, for being part of the same program.
Gemini must also cooperate in the Office of the Attorney General’s case against Digital Currency Group (DCG), its CEO Barry Silbert, and its former CEO Soichiro Moro. NY Attorney General Letitia James has built quite the reputation for bringing justice to investors defrauded by digital asset businesses.
She got KuCoin to settle for $22 million in 2022 because the exchange operated in the state without a license. She also jointly secured $24 million from Nexo for functioning illegally. Her next big case involves the lawsuit against former Celsius founder Alex Mashinsky, which begins in January 2025.
Image by Sergei Tokmakov, Esq. https://Terms.Law from Pixabay