Brayden Lindrea1 hour agoGemini to return at least $1.1B to Earn customers in settlement with NYDFSGemini said that 97% of the assets should be recoverable within two months and the remaining asset balance within the next 12 months.387 Total views1 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksCryptocurrency exchange Gemini and New York State Department of Financial Services (NYDFS) have reached a settlement that will see Gemini return at least $1.1 billion to customers of the Gemini Earn Program through the Genesis bankruptcy proceeding.
Gemini will also pay a $37 million penalty for multiple compliance failures “that threatened the safety and soundness of the company,” Superintendent Adrienne A. Harris of the NYDFS explainedin a Feb. 28 statement.NEW: Superintendent Adrienne A. Harris Secures Commitment from Gemini Trust Company, LLC to Return at Least $1.1 Billion to Earn Program Customers
More Here: https://t.co/QHIxcTDTJD pic.twitter.com/Q2DFJmS8sH— NYDFS (@NYDFS) February 28, 2024
If approved by the bankruptcy court, Gemini said it expects Earn users toreceive 100% of their cryptocurrency assets back plus appreciation on top of that.
“If approved, we will be returning over $1.8 billion in value (at today’s prices) — $700 million more than when Genesis halted withdrawals on November 16, 2022.”
Approximately 97% of these assets should be recoverable within about two months, Gemini added.Earn Update: Today, we are pleased to announce that we have finally reached a settlement in principle with Genesis and other creditors in the Genesis Bankruptcy that will, if approved by the Bankruptcy Court, result in all Earn users receiving 100% of their digital assets back in…— GeminiTrustCo (@GeminiTrustCo) February 28, 2024
As part of the agreement, Gemini agreed to contribute $40 million to the Genesis Global Capital (GGC) bankruptcy for the benefit of Earn customers, Harris revealed.
“Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown,” Harris said.“Today’s settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini.”
Harris noted the NYDFS could bring further action against Gemini if it fails to fulfill its obligations.
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Gemini launched the Earn program in February 2021, where Earn customers loaned their coins to GGC (which Harris noted wasn’t licensed by NYDFS).
GGC then loaned those same assets to its own counterparties, where Earn customers received interest payments. However, GGC went bankrupt in January 2023 and defaulted on approximately $1 billion worth of loans made by Earn customers.
NYDFS accused Gemini of not fully vetting or sufficiently monitoring GGC’s conduct throughout the life of Earn.
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