- Gemini agreed to pay a $37 million fine and return over $1 billion to Earn customers as part of a settlement with the NY regulator over issues with Genesis Global Capital.
- The settlement aims to compensate Earn users who were unable to access their crypto assets after Genesis faced liquidity problems and halted withdrawals.
- As part of the agreement, Gemini will contribute $40 million to Genesis’ bankruptcy case to help Earn customers receive a full recovery of their digital assets.
Crypto exchange Gemini has agreed to pay a hefty fine to the New York State Department of Financial Services (NYDFS) and return over $1 billion to customers of its Gemini Earn program as part of a settlement with the regulator. The agreement aims to compensate customers who were unable to access their assets after issues with Genesis Global Capital, which offered crypto lending services to Gemini Earn users.
Details of the Settlement
As part of the settlement, Gemini will pay a $37 million fine to the NYDFS for compliance failures related to vetting and monitoring Genesis Global Capital. The exchange will also contribute $40 million towards Genesis’ ongoing bankruptcy proceedings. Additionally, Gemini has committed to working through the bankruptcy process to ensure Earn customers receive a full recovery of their digital assets. According to the NYDFS, over 200,000 Earn customers have been unable to access their cryptocurrency due to Genesis’ financial issues.
Background on Gemini Earn
Gemini launched Earn in 2021, allowing customers to loan their crypto to Genesis Global Capital and earn high interest rates. However, after the collapse of crypto hedge fund Three Arrows Capital and exchange FTX, Genesis faced liquidity issues and was unable to meet customer withdrawals. This left many Earn users unable to access their lent assets. Separately, Gemini and Genesis have faced lawsuits from regulators over the Earn program.
Looking Ahead
The settlement aims to compensate Earn users who entrusted their crypto to Gemini and Genesis. If approved by the bankruptcy court, customers will receive 100% of their digital assets back. While the process has been lengthy, the agreement represents a step towards resolution.
