New York recovers $50m for investors defrauded by Gemini Earn program
The state of New York recovered $50 million in digital assets from crypto exchange Gemini Trust in a settlement for investors defrauded by its Gemini Earn program, while also banning the platform from crypto lending.
The New York Attorney General’s Office sued Gemini last October, claiming it misled thousands of investors about the risks associated with Gemini Earn, an investment program it offered with another cryptocurrency company, Genesis Global Capital.
The settlement provides all defrauded investors full recovery of the assets they invested in the Earn program but were unable to withdraw when the investment program collapsed.
Gemini had claimed the Earn program was a “low-risk” investment option, while failing to disclose that Genesis loans were under-secured and concentrated in Alameda Research, the sister company of now bankrupt FTX, according to the attorney general.
“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,” Attorney General Letitia James said in a statement.
She added: “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.”
Gemini, run by billionaire twin brothers Cameron and Tyler Winklevoss, will provide full recoveries to more than 230,000 Earn investors, including those in New York.
Gemini said in a post on X that the funds will be available in investors’ accounts within seven days.
“With this final distribution, Earn users will have received 100% of the assets owed to them,” it added.
Gemini did not admit or deny wrongdoing in agreeing to the lending ban and settlement.
Last month, Attorney General James secured $2 billion from Genesis for defrauded victims.
Crypto market movers
- Bitcoin is down 1.24% today at $66,124.70.
- Ethereum is up 0.72% today at $3,543.05.
