The cryptocurrency exchange, Gemini is set to reimburse a minimum of $1.1 billion to customers impacted by its defunct lending program and pay a $37 million fine due to unsafe and unsound practices, as outlined in a settlement with the New York Department of Financial Services, disclosed on Wednesday.
The terminated Gemini Earn program, which was operated in collaboration with crypto lender Genesis Global Capital, was halted amid the crypto market crash in November 2022.
The aftermath saw Genesis filing for bankruptcy, sparking a complex legal dispute involving Genesis, Gemini, and Genesis’s parent company, Digital Currency Group.
The settlement brings a glimmer of hope for Gemini’s Earn customers, who have been unable to access their funds in these accounts since late 2022. According to NYDFS, the regulator reserves the right to take additional action against Gemini if the company fails to fulfill its commitment of returning a minimum of $1.1 billion to customers post the resolution of Genesis’ bankruptcy.
As part of the settlement, Gemini has committed to contributing $40 million to facilitate the conclusion of Genesis’ bankruptcy, ensuring a beneficial outcome for Earn customers, as stated by the regulator.
Gemini, co-founded and run by Cameron and Tyler Winklevoss, commonly known as the Winklevoss twins, gained widespread recognition for their legal dispute against Meta’s CEO, Mark Zuckerberg.
