Breaking: Gemini Agrees To $50 Million Fraud Lawsuit Settlement
Highlights
- Gemini agreed to pay about $50 million to reinstate users.
- The company was also restricted from carrying out crypto lending business in New York.
- This comes after New York’s AG filed a lawsuit against the firm in October.
Crypto exchange Gemini agreed to a $50 million settlement to resolve fraud claims following the collapse of its lending program, Gemini Earn. This comes after a crackdown on crypto-related lending programs in New York. Authorities say the settlement will reinstate defrauded investors while waning crypto firms of associated practices.
Gemini To Pay Investors $50 Million
The company will resolve the lawsuit filed by New York’s Attorney General Letitia James which accused the firm of lying to over 230,000 users of its Gemini Earn Program. According to the consent judgment disclosed on June 14, the company will pay about $50 million through complete restitution to affected users.
“Within seven (7) days of the execution of this Stipulation, Gemini agrees to make complete restitution to the Earn Investor on an in-kind “coin-for-coin” basis as described in Paragraph 7 hereof i.e distributions made in the same amount and types of cryptocurrencies loaned by the Earn Investor.”
The lawsuit was filed in October accusing the firm of not disclosing the risk posed by Gemini Earn. The company described the program as a low-rain investment while investigations showed risky financials. According to James in a press release, at least 29,000 New York residents had their trust broken through the program adding that the settlement will reinstate investors and serve as a reminder to cryptocurrency companies.
Per the press release, investors will not be required to take any action and will access their cryptocurrencies in the accounts.
Banned From Operating In New York
In addition to the settlement fees, Gemini is banned from operating crypto lending programs in New York either directly or indirectly.
“Gemini is permanently restrained and enjoined from directly or indirectly engaging in the lending of any cryptocurrency in the State of New York. Gemini certifies under penalties of perjury that it has ceased Gemini Earn and will not hereafter conduct or transact any business under Gemini Earn…”
However, in the event of future legislation that allows crypto lending programs in New York, the company will seek the OAG’s permission to waive compliance with this provision.
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