Gemini Trust Co. Reaches $1.1 Billion Agreement with NYDFS to Provide Restitution to Earn Customers
Gemini Trust Co. has reached an agreement with the New York Department of Financial Services (NYDFS), resulting in a $1.1 billion return to customers and a $37 million fine. This resolution marks the end of the Gemini Earn program dispute.
To fully comprehend the terms and intricacies of this settlement, let’s delve into the details.
NYDFS Announcement
On February 28, 2024, Superintendent Adrienne A. Harris of NYDFS announced the settlement, stating, “Today’s settlement is a victory for Earn customers, who deserve the return of the assets they entrusted to Gemini.”
The settlement outlines Gemini’s commitment to returning at least $1.1 billion to Earn program customers through the bankruptcy proceedings of Genesis Global Capital, LLC. Furthermore, Gemini will contribute $40 million to the bankruptcy for the benefit of Earn customers.
Superintendent Harris emphasized Gemini’s failure to conduct proper due diligence on the unregulated third party, which resulted in extensive fraud allegations and harm to the Earn program customers.
The Earn program, launched on February 1, 2021, allowed Gemini customers to lend their virtual currency to an unregulated third party, Genesis Global Capital (GGC). GGC defaulted on loans worth approximately $1 billion in November 2022, causing reputational and financial damage to Gemini and impacting over 200,000 Earn customers.
Gemini’s Response and Updates
Gemini acknowledged the settlement in its Earn Updates, stating, “We have reached a preliminary settlement with Genesis and other creditors in the Genesis Bankruptcy that, if approved by the Bankruptcy Court, will result in all Earn users receiving their digital assets back in full.”
In short, the settlement between Gemini Trust Co. and the NYDFS is still awaiting final approval, and the necessary Bankruptcy Court process could take up to two months to complete.
However, Gemini expressed optimism that if approved by the Bankruptcy Court, the settlement would ensure that all Earn users receive their digital assets back in full.
As part of the settlement, Gemini has committed to returning over $1.8 billion in value at the current market prices, surpassing the amount when Genesis halted withdrawals in November 2022.
Earn users can anticipate receiving approximately 97% of their assets in full within approximately two months, with the remaining balance delivered within the next 12 months.
In Summary…
Gemini’s $1.1 billion settlement represents a significant milestone in the Gemini Earn Program saga. This settlement has been reached after addressing compliance issues, fraud allegations, and reputational harm caused by Gemini during the program. It finally provides a path for Earn program customers to receive their rightful compensations.
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