Letitia James, the Attorney General of New York, has reached a settlement with the cryptocurrency exchange Gemini for $50 million to resolve allegations of fraud.
In a recent announcement, James revealed that she has recovered $50 million in digital assets for 230,000 investors who were reportedly deceived by Gemini’s Earn program. This program, which involved a partnership with crypto lender Genesis to offer staking rewards, left investors in the lurch when Genesis declared bankruptcy in 2022, preventing Gemini from fulfilling its obligations to customers.
Following an investigation in 2023, James discovered that Gemini was aware of the risky nature of Genesis’ loans and the high concentration of funds with a single entity, yet failed to disclose this crucial information to investors. James expressed her disappointment, stating, “Hundreds of thousands of individuals, including 29,000 New Yorkers, fell victim to Gemini’s deceitful Earn program, which falsely promised investment growth while locking investors out of their accounts. This settlement aims to compensate defrauded investors and serves as a warning to cryptocurrency companies that fraudulent practices will not be tolerated.”
Gemini took to social media platform X to acknowledge the settlement and assure customers that they will receive 100% of the crypto assets owed to them. They announced, “We are pleased to announce that final Earn distributions, representing the remaining 3% of digital assets owed to users as of November 16, 2022, will be available in Gemini accounts within seven days. This will ensure that Earn users receive the full amount owed to them.”
In a separate development, Genesis also settled with James for a record-breaking $2 billion, marking the largest crypto settlement in the state’s history.
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