Crypto firm Gemini to pay over $1 billion back to customers in settlement

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The cryptocurrency exchange Gemini has promised to return $1.1 billion to customers as part of a settlement it reached with New York’s Department of Financial Services (NYDFS). Gemini will also have to pay $37 million to the NYDFS “for significant failures that threatened the safety and soundness of the company.”

The NYDFS claims Gemini, which is owned by twins Tyler and Cameron Winklevoss, had “compliance, management, and internal audit issues” when it came to managing its Earn program. Introduced in 2021, Gemini’s Earn program let customers loan their cryptocurrency to the crypto brokerage Genesis Global Capital while receiving interest.

However, the NYDFS says Genesis “was not fully vetted nor sufficiently monitored by Gemini.” When Genesis defaulted on loans in November 2022 and filed for bankruptcy last year, around 200,000 Gemini Earn customers were unable to access $1.1 billion (valued at around $1.8 billion today) in funds.

In an update published on its website, Gemini says that if the settlement is approved, it will result in “all Earn users receiving 100% of their digital assets back in kind.” The company says customers can expect to receive 97 percent of assets in around two months, while the remainder could arrive over the next year.

“We’ve worked tirelessly over the past 15 months to advocate for Earn users and seek the return of their assets,” Gemini says. “Being able to return assets on a coin-for-coin basis to our customers was critical for us.”

Gemini is still facing a lawsuit from New York Attorney General Letitia James that alleges Gemini, Genesis, and Genesis parent company Digital Currency Group “lied to investors and tried to hide more than a billion dollars in losses.” However, James expanded the lawsuit earlier this month and now claims the three companies’ schemes resulted in losses amounting to $3 billion.


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Crypto firm Gemini to pay over $1 billion back to customers in settlement

The cryptocurrency exchange Gemini has promised to return $1.1 billion to customers as part of a settlement it reached with New York’s Department of Financial Services (NYDFS). Gemini will also have to pay $37 million to the NYDFS “for significant failures that threatened the safety and soundness of the company.”

The NYDFS claims Gemini, which is owned by twins Tyler and Cameron Winklevoss, had “compliance, management, and internal audit issues” when it came to managing its Earn program. Introduced in 2021, Gemini’s Earn program let customers loan their cryptocurrency to the crypto brokerage Genesis Global Capital while receiving interest.

However, the NYDFS says Genesis “was not fully vetted nor sufficiently monitored by Gemini.” When Genesis defaulted on loans in November 2022 and filed for bankruptcy last year, around 200,000 Gemini Earn customers were unable to access $1.1 billion (valued at around $1.8 billion today) in funds.

In an update published on its website, Gemini says that if the settlement is approved, it will result in “all Earn users receiving 100% of their digital assets back in kind.” The company says customers can expect to receive 97 percent of assets in around two months, while the remainder could arrive over the next year.

“We’ve worked tirelessly over the past 15 months to advocate for Earn users and seek the return of their assets,” Gemini says. “Being able to return assets on a coin-for-coin basis to our customers was critical for us.”

Gemini is still facing a lawsuit from New York Attorney General Letitia James that alleges Gemini, Genesis, and Genesis parent company Digital Currency Group “lied to investors and tried to hide more than a billion dollars in losses.” However, James expanded the lawsuit earlier this month and now claims the three companies’ schemes resulted in losses amounting to $3 billion.


Source link

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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