Gemini agrees to $50M settlement with New York attorney general

The New York State Attorney General’s Office announced that it has entered into a settlement with cryptocurrency exchange Gemini Trust Company, LLC (Gemini) and its former business partner Genesis. Global Capital and other defendants reached a settlement of approximately $50 million in a high-stakes lawsuit. The settlement marks the latest development in a legal dispute involving all parties.

Gemini is banned from operating cryptocurrency lending projects

At a press conference last Friday, New York State Attorney General Letitia James announced that $50 million in funds had been successfully recovered, which will be used to compensate those who made money due to the popularity of the Gemini exchange Victims of financial losses suffered as a result of the scheme. This action marks substantial progress in the investigation into Gemini and its related schemes and results in a level of compensation for affected investors.

James revealed that more than 230,000 investors, including 29,000 New York residents, were deceived into investing in Gemini's Earn, an investment scheme operated in partnership with defunct cryptocurrency lender Genesis Global. The Attorney General pointed out that these investors were unknowingly involved in this risky investment scheme.

Gemini Earn Project’s Misleading Behavior

Attorney General Letitia James emphasized that the Earn program launched by Gemini severely damaged the trust of hundreds of thousands of investors, including at least 29,000 New York residents. She pointed out that Gemini promoted the plan as a means to help investors increase the value of their funds, but in fact it misled the public and subsequently blocked investors' accounts, resulting in funds being defrauded. This behavior not only violated the trust of investors, but also violated the law.

The Gemini Earn program it worked with collapsed after Genesis Global Capital filed for bankruptcy in November 2022, an incident that left investors without access to more than $900 million worth of their assets.

Subsequently, in October 2023, the New York Attorney General's Office initiated legal action against Gemini, Genesis and its parent company Digital Currency Group (DCG), along with DCG's CEO Barry Silbert and Genesis' former head Saichiro Moro filed a lawsuit to hold them accountable for their role in the incident.

Legal Actions and SettlementAgreement

In addition to Gemini’s recent payment, the lawsuit also resulted in a $2 billion settlement with Genesis, the largest amount ever given by a state government to a cryptocurrency company. As part of the agreement, Gemini is also prohibited from operating any cryptocurrency lending companies in New York. In addition, the exchange must assist the New York Attorney General in prosecuting the other defendants.

Commenting on the recent settlement victory, Letitia James emphasized that this settlement agreement will ensure that investors who have been defrauded receive the compensation they deserve. She explicitly warned all cryptocurrency companies that any attempt to defraud investors is illegal and her office will not tolerate such behavior.

She further noted that she has made notable achievements in regulatory enforcement in the cryptocurrency space over the past few years, particularly in prosecuting companies such as KuCoin and Nexo for alleged violations and successfully obtained settlements of US$22 million and US$24 million. Jin, showing her firm commitment to maintaining market order and protecting the rights and interests of investors.

Conclusion：

The settlement between Gemini and the New York State Attorney General's Office not only provides necessary compensation for the injured investors, but also sends a strong signal to the entire cryptocurrency industry: regulatory agencies will strictly crack down on dishonest behavior and protect the rights and interests of investors.

At the same time, Letitia James’s firm stance and actions indicate that any behavior that violates the law and damages investor trust will be severely punished by law. As the cryptocurrency industry continues to develop, reasonable regulation and industry self-discipline will be key to ensuring its healthy growth.

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