Gemini

2024

when

<p>In a significant development in the ongoing saga surrounding the Genesis Global Capital (GGC) bankruptcy, cryptocurrency exchange <a href="https://www.cryptopolitan.com/gemini-announces-settlement-for-earning/" rel="noopener noreferrer nofollow">Gemini</a> has announced a landmark agreement with the New York State Department of Financial Services (NYDFS). Under the settlement terms, Gemini will return over $1 billion to customers who participated in its Earn Program.</p>
<h2 class="wp-block-heading" id="background-genesis-global-capital-bankruptcy-settlement">Background: Genesis Global Capital bankruptcy settlement</h2>
<p>The settlement follows months of uncertainty for customers who had participated in Gemini’s Earn Program, which allowed users to earn passive income by loaning their digital assets to GGC through a partnership with Gemini. However, withdrawals from the program were suspended in November 2022 at GGC’s request, leading to widespread concern among users.</p>
<p>In January 2023, the Earn Program was permanently terminated, prompting legal action from customers and regulatory scrutiny from the US Securities and Exchange Commission (SEC). The SEC filed charges against Gemini and GGC, alleging that they had offered unregistered securities through the Earn Program.</p>
<h2 class="wp-block-heading" id="key-terms-of-the-settlement">Key terms of the settlement</h2>
<p>Under the settlement terms, Earn Program customers will receive 100% of their digital assets back in kind, amounting to over $1.8 billion at current market prices. This represents a significant increase from the value of the assets when withdrawals were halted almost two years ago.</p>
<p>Gemini has committed to returning approximately 97% of the assets within a two-month timeframe following approval of the settlement. The remaining 3% will be distributed within 12 months. However, finalizing the required Bankruptcy Court process could take up to two months.</p>
<p><a href="https://www.cryptopolitan.com/gemini-to-pay-back-97-of-customer-assets/" rel="noopener noreferrer nofollow">Gemini</a> will also contribute $40 million to the GGC bankruptcy to benefit Earn Program customers. Additionally, the exchange will pay a $37 million fine to the NYDFS for what the regulator described as “significant failures” in safeguarding its customers.</p>
<h2 class="wp-block-heading" id="implications-and-reactions">Implications and reactions</h2>
<p>The settlement has been hailed as a victory for Earn Program customers, who will regain access to assets they entrusted to <a href="https://twitter.com/GeminiTrustCo/status/1762954631150207226" rel="noopener noreferrer nofollow" target="_blank">Gemini</a>. Superintendent Adrienne Harries of the NYDFS emphasized holding companies accountable for their failures to protect customers’ interests.</p>
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   <p lang="en" dir="ltr">Earn Update: Today, we are pleased to announce that we have finally reached a settlement in principle with Genesis and other creditors in the Genesis Bankruptcy that will, if approved by the Bankruptcy Court, result in all Earn users receiving 100% of their digital assets back in…</p>— GeminiTrustCo (@GeminiTrustCo) <a href="https://twitter.com/GeminiTrustCo/status/1762954631150207226?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">February 28, 2024</a>
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<p>Gemini’s failure to conduct due diligence on GGC, an unregulated third party later accused of massive fraud, has raised concerns about the exchange’s risk management practices. The NYDFS has reserved the right to take further legal action against Gemini if it fails to fulfill its obligation to return at least $1.1 billion to Earn Program customers.</p>

Gemini agrees to return over $1 billion to earn program customers in settlement

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