Gemini to Return $1.1 Billion to Customers in Regulatory Settlement
Gemini’s Regulatory Settlement
Gemini, a cryptocurrency exchange, has agreed to return at least $1.1 billion to customers of its defunct lending program and pay a $37 million fine for unsafe practices in a settlement with the New York Department of Financial Services (NYDFS). This resolution follows the halting of Gemini’s Earn program during a crypto market crash in November 2022, leading to Genesis Global Capital’s bankruptcy.
Customer Redemption
The settlement marks a crucial step in allowing Gemini’s Earn customers to reclaim their funds, which have been inaccessible since late 2022. The NYDFS retains the right to take further action if Gemini fails to fulfill its commitment to returning the minimum $1.1 billion to customers post-Genesis’s bankruptcy resolution.
Gemini’s Background
Founded by the Winklevoss twins, Gemini previously engaged in a crypto lending partnership with DCG, enabling customers to earn interest by loaning their assets to Genesis. However, NYDFS alleged that Gemini neglected due diligence on Genesis and lacked adequate reserves throughout the Earn program’s duration.
NYDFS’s Assertion
NYDFS Superintendent Adrienne Harris criticized Gemini for failing to scrutinize Genesis, resulting in customer losses amid the latter’s financial collapse. The settlement aims to secure a coin-for-coin recovery for affected Earn users, offering a semblance of justice for their assets.
Gemini’s Response
In a blog post, Gemini expressed gratitude to NYDFS for facilitating the settlement and reiterated its efforts to advocate for Earn customers. The company emphasized its dedication to assisting users in recovering their assets following the program’s tumultuous end.
Overall, Gemini’s regulatory settlement signifies a pivotal moment for affected customers seeking redemption after the tumult of the crypto market crash. The resolution underscores the importance of due diligence and financial prudence in the cryptocurrency sector, highlighting the need for responsible practices to safeguard investor interests.
