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Gemini Set to Reimburse Earn Customers with Over $1 Billion

Gemini Set to Reimburse Earn Customers with Over $1 Billion

Key Takeaways

  • Gemini commits to fully reimbursing over $1.1 billion to its Earn customers as part of a settlement with NYDFS, following the bankruptcy of service provider Genesis.
  • The settlement includes a $40 million contribution to Genesis' bankruptcy proceedings and a $37 million payment to NYDFS.
  • NYDFS' investigation into Gemini unearthed practices endangering the company's financial health.

The New York Department of Financial Services (NYDFS) has disclosed a settlement that ensures customers of the now-inoperative Gemini Earn program will reclaim all their investments, totaling more than $1.1 billion.

This move comes after the program's service provider, Genesis Global Capital (GGC), faced bankruptcy, impacting the program's operation and its participants.

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NYDFS has outlined a plan where the Winklevoss-led Gemini will contribute $40 million to the GGC's bankruptcy and an additional $37 million in payments to NYDFS.

Gemini also pledges to secure at least $1.1 billion for its Earn customers, aligning with the completion of Genesis' bankruptcy process. This commitment was highlighted in a post on the Gemini X account, promising to return their customers' digital assets in full, pending judicial approval.

This addresses the concerns raised by the suspension of customer withdrawals by Genesis in November 2022, which had impacted approximately 200,000 customers.

Genesis' later bankruptcy filing in January 2023 followed allegations from the NYDFS that Gemini had not adequately vetted GGC for its regulatory compliance.

This lack of due diligence came under further scrutiny when the Attorney General's office sued another division of Genesis for fraud, exposing the vulnerabilities within the Earn program and its backend operations.

Moreover, the investigation by NYDFS revealed Gemini's engagement in practices that jeopardized its financial stability:

Gemini Liquidity, LLC, an unregulated affiliate, collected hundreds of millions of dollars in fees from Gemini customers that otherwise could have gone to Gemini, substantially weakening Gemini’s financial condition.

The settlement marks a significant step towards resolving the uncertainties Gemini Earn customers face.

In other news, the Winklevoss twins, co-founders of Gemini, have recently donated $4.9 million to Fairshake PAC, aiming to enhance the electoral prospects of pro-crypto candidates in the upcoming U.S. elections.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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