Gemini, NYAG reach $50M settlement

The New York Attorney General’s office said it recovered $50 million from Gemini for “defrauded investors” on Friday.

As part of the settlement, Gemini is banned from operating crypto lending programs in New York.

The settlement also states Gemini Earn investors will receive $50 million in digital assets. The press release said that impacted investors will be able to access the crypto directly in their accounts.

“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,” said New York Attorney General Letitia James.

“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,” she continued.

Gemini said it was “pleased to announce that in connection with the final Earn distribution, Gemini has entered into an agreement with the New York Attorney General to settle the lawsuit the NYAG brought against Gemini…”

Gemini was a named defendant in a larger lawsuit brought on by the NYAG in the fall of last year. Bankrupt lender Genesis and its parent company Digital Currency Group were also named in the suit.

As part of the settlement, Gemini will also “cooperate with the Office of the Attorney General’s litigation” against DCG, DCG CEO Barry Silbert and former Genesis CEO Soichiro Moro.

Friday’s announcement is the second settlement to come out of the suit, following a $2 billion settlement reached between the NYAG and Genesis.

The NYAG announced the Victim’s Fund for Genesis creators in late May after a bankruptcy judge approved the settlement.

Updated June 14, 2024 at 1:13 pm ET: Added comment from Gemini representative.

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