Gemini, a cryptocurrency exchange, has settled with the New York Attorney General (NYAG) and consented to provide $50 million in digital assets to investors in its Gemini Earn program.
According to an official proclamation, the settlement results from allegations by NYAG Letitia James that Gemini “misled thousands of investors,” including residents of New York, regarding the risks associated with the program.
Gemini Earn enabled consumers to lend their cryptocurrencies to Genesis Global Capital, LLC, with the assurance of earning an annual percentage yield (APY) of up to 7.4 percent.
Nevertheless, the NYAG has alleged that Gemini deceptively marketed the program and prevented investors from accessing their accounts.
Letitia James stated that Gemini “marketed its Earn program as a means for investors to increase their wealth, but in reality, it deceived them and prevented them from accessing 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.”
All Gemini Investors to Receive Full Recovery
All investors unable to withdraw their funds during the investment program’s collapse will receive a complete recovery of their invested assets as part of the settlement.
In addition, Gemini is prohibited from conducting any crypto lending programs in the state of New York.
A complaint was initially lodged by the NYAG against Gemini, Genesis, and Digital Currency Group (DCG) in October.
The complaint alleged that Gemini deceived investors and provided false assurances regarding the minimal risk of investing in the Earn program through Genesis.
The NYAG also accused DCG, Genesis, and two executives of concealing $1.1 billion in losses through misstatements and omissions.
In a recent announcement, Gemini stated that Earn users would receive $2.18 billion in in-kind cryptocurrencies, which means they would be refunded with the same digital assets they initially invested.
According to Gemini, these distributions represent a 232% recovery from the time withdrawals were suspended in November 2022.
Gemini guaranteed that the final Earn distributions would be accessible in their accounts within seven days.
Gemini to Distribute More Than $2 Billion to Earn Users
Gemini announced the complete recovery of digital assets for participants of its Earn program in late May.
A settlement of $1.1 billion is included in the recovery plan. It guarantees that users will receive the entire value of their assets, which may surpass the initial value due to asset appreciation during the holding period.
The distributions also represent a 232% recovery from when withdrawals were suspended in November 2022.
Gemini provided an optional program known as Earn, which allowed consumers to lend their crypto holdings to the company in exchange for interest.
Launched in early 2021 with Genesis, the program guaranteed a 7.4% return on deposits.
Nevertheless, in January 2023, Gemini was compelled to terminate Earn due to Genesis’ failure to reimburse the company for more than $900 million in assets.
