Crypto firm Gemini to pay over $1 billion back to customers in settlement

Gemini Settlement: Gemini, a cryptocurrency exchange, has agreed to return $1.1 billion to customers as part of a settlement reached with New York’s Department of Financial Services (NYDFS).

Compliance Issues: The settlement stems from allegations by the NYDFS regarding compliance, management, and internal audit issues within Gemini's Earn program, which allowed customers to loan their cryptocurrency for interest.

Genesis Default: The NYDFS claims that Gemini failed to properly vet and monitor Genesis Global Capital, the entity managing the loans, leading to defaults on loans and bankruptcy filings, leaving around 200,000 customers unable to access $1.1 billion in funds.

Asset Return: Gemini has pledged to return 100% of customers' digital assets back in kind if the settlement is approved, with 97% of assets expected to be returned within two months and the remainder over the next year.

Advocacy Efforts: Gemini states that it has worked diligently over the past 15 months to advocate for customers and secure the return of their assets, emphasizing the importance of returning assets on a coin-for-coin basis.

Ongoing Lawsuit: Despite the settlement, Gemini is still facing a lawsuit from New York Attorney General Letitia James, who alleges that Gemini, Genesis, and Genesis' parent company, Digital Currency Group, engaged in fraudulent schemes resulting in significant losses.

Expanded Allegations: Attorney General James recently expanded the lawsuit, claiming that the companies' actions resulted in losses totaling $3 billion, highlighting the ongoing legal challenges facing Gemini and its affiliates.