Gemini, a cryptocurrency exchange, has been banned from operating lending programs in New York. The company will refund $50 million in digital assets to investors who were affected by their Gemini Earn program. This money will be used to reimburse investors, including at least 29,000 New Yorkers, who were impacted by the program and had their trust broken. The New York Attorney General’s office highlighted that Gemini marketed its Earn program as a way for investors to grow their money, but in reality, it posed a high risk and locked investors out of their accounts.
Gemini charged agent fees of over 4% for the service and the situation was further complicated when Genesis, the entity that facilitated the lending program, filed for Chapter 11 bankruptcy. As a result, more than 230,000 Gemini Earn investors were affected, prompting the refund of digital assets. Importantly, affected investors do not need to take any action to reclaim their digital assets. By agreeing to the settlement and refunding the digital assets, Gemini aims to make defrauded investors whole.
The Attorney General emphasized that deceiving investors is illegal and will not be tolerated, sending a message to cryptocurrency companies about the consequences of such actions.