Gemini Commits to Returning $1.1 Billion to Customers

Crypto firm Gemini has committed to returning at least $1.1 billion to customers who lost their funds due to the company’s partnership with now-bankrupt Genesis.

Gemini’s Agreement

Gemini, founded by Tyler and Cameron Winklevoss, made this commitment in an agreement with the New York State Department of Financial Services (NYDFS). Alongside this commitment, the company will pay a $37 million fine. This agreement stems from a failed partnership between Gemini and DCG’s unit Genesis, centered around the former’s Earn interest-bearing product.

Frozen Assets

Last year, customer assets were frozen when Genesis suspended withdrawals after the FTX collapse. Reportedly, over 200,000 Earn customers are still unable to access their virtual currency, the value of which stands at a minimum of $1.1 billion.

Adrienne Harris, the Superintendent, stated that Gemini failed to conduct the necessary due diligence on an unregulated third party, later accused of considerable fraud. This negligence harmed Earn customers who abruptly found themselves unable to access their assets after Genesis Global Capital experienced financial turbulence.

Plan to Return Assets

Gemini has communicated that Earn users can expect to recover approximately 97% of their assets “in kind” within roughly two months, with the remaining assets returned within a year. The crypto firm will also contribute $40 million to Genesis’ bankruptcy proceedings, to further benefit Earn customers.

Legal Challenges

In October, New York Attorney General Letitia James initiated a lawsuit against Gemini and Genesis’s parent over the Earn product. Additionally, the Securities and Exchange Commission (SEC) has charged both firms with offering and selling unregistered securities.