- By Peter Hoskins
- Business reporter
Image source, Getty Images
Tyler Winklevoss and Cameron Winklevoss
Cryptocurrency exchange Gemini has agreed to return at least $1.1bn (£870m) to customers of its defunct lending programme as part of a settlement with the New York Department of Financial Services (NYDFS).
The company will also pay a $37m fine for “significant failures”.
Gemini’s Earn programme was halted during a crypto crash in November 2022.
“Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown,” NYDFS Superintendent Adrienne Harris said in a statement.
“Today’s settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini.”
The NYDFS also said it could bring further action against Gemini if it did not return at least $1.1bn to customers.
In a blog post Gemini said it had “worked tirelessly over the past 15 months to advocate for Earn users and seek the return of their assets”.
“If approved, we will be returning over $1.8 billion in value (at today’s prices) — $700 million more than when Genesis halted withdrawals on November 16, 2022.”
The company also said it would contribute $40m to the conclusion of Genesis’ bankruptcy in order to benefit Earn customers.
The Earn programme was offered in partnership with cryptocurrency lender Genesis Global Capital.
It was halted in November 2022, followed by Genesis filing for bankruptcy. Since then there has been extensive litigation between Genesis, Gemini and Genesis’ parent company, Digital Currency Group.
Gemini Earn customers have been unable to access their funds in those accounts since late 2022. The settlement means they are one step closer to getting their money back.
Gemini is run by the Winklevoss twins, Tyler and Cameron, who are also known for a long-running legal dispute with Facebook and its boss Mark Zuckerberg.
The companies were accused of breaking the law by offering and selling the products through Earn, which launched in 2021.
The US Securities and Exchange Commission is in charge of the case.
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