A $37 million fine for “significant failures” will also be paid by the corporation.
The Earn program of Gemini was suspended in November 2022 due to a cryptocurrency crash.
Twins Tyler and Cameron Winklevoss, well-known for their legal battle with Facebook, co-founded the exchange.
“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.”
Adrienne Harris, NYDFS Superintendent
“Today’s settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini.”
In addition, the NYDFS threatened to take Gemini to court if the company failed to reimburse clients for at least $1.1 billion.
Gemini claimed to have “worked tirelessly over the past 15 months to advocate for Earn users and seek the return of their assets” in a blog post.
“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.”
Additionally, the business declared that it will give $40 million to help Genesis emerge from bankruptcy so that Earn consumers would be helped.
In collaboration with cryptocurrency lender Genesis Global Capital, the Earn program was made available.
It was put on hold in November 2022, and Genesis then filed into bankruptcy. Since then, Genesis, Gemini, and Digital Currency Group, Genesis’ parent firm, have been embroiled in protracted legal battles.
Since late 2022, Gemini Earn customers have not been able to access the money in such accounts. They are now one step closer to receiving their money back thanks to the settlement.
The Winklevoss twins, Tyler and Cameron, who manage Gemini, are well-known for their protracted court battle with Mark Zuckerberg, the CEO of Facebook.
US regulators accused Gemini and Genesis in January 2023 of selling cryptocurrency assets to thousands of investors without authorization.
By making the products available and selling them through Earn, which debuted in 2021, the corporations were charged with violating the law.
The matter is under the purview of the US Securities and Exchange Commission.
