Gemini Trust Company, the cryptocurrency exchange founded by billionaires Cameron and Tyler Winklevoss, will return $1.1 billion** to customers impacted by its discontinued Earn program. The settlement, announced by New York regulators, also includes a **$37 million fine for compliance failures.
Key Details of the Settlement
- Customer Restitution: $1.1 billion to be returned to Earn program participants.
- Regulatory Fine: $37 million paid to the New York State Department of Financial Services (NYDFS).
- Genesis Bankruptcy Impact: Funds were frozen after Genesis Global Capital’s collapse in November 2022.
Regulatory Findings
NYDFS Superintendent Adrienne A. Harris cited Gemini’s lack of due diligence:
"Gemini failed to vet an unregulated third party later accused of fraud, leaving Earn customers unable to access assets after Genesis’s meltdown."
The Earn program, operated with Genesis, promised interest payments but collapsed when Genesis defaulted on $1 billion in loans. Over 200,000 customers were affected.
Timeline of Events
- November 2022: Crypto market crash halts Earn program.
- January 2023: Genesis files for bankruptcy.
- February 2025: Settlement announced, pending court approval.
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What’s Next for Earn Customers?
- Asset Recovery: 97% of funds expected within 2 months of court approval.
- Remaining Balance: Full restitution within 12 months.
- Gemini’s Commitment: $40 million pledged to resolve Genesis’s bankruptcy.
FAQs
Q: How will customers get their funds back?
A: Assets will be returned "in kind" (as cryptocurrency) via a court-approved plan.
Q: What was Gemini’s role in the collapse?
A: Gemini partnered with Genesis but failed to ensure its regulatory compliance.
Q: Is Gemini still operational?
A: Yes, but the Earn program remains discontinued.
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Broader Implications
This case underscores the risks of unregulated crypto lending programs. The NYDFS retains the right to take further action if Gemini fails to meet its obligations.
Keywords: Gemini crypto exchange, Genesis bankruptcy, NYDFS settlement, Earn program restitution, Winklevoss twins, cryptocurrency regulations.
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