Cryptocurrency exchange Gemini faces a settlement with the New York Department of Financial Services (NYDFS) after being accused of failing to conduct proper due diligence on a third party. This third party, later accused of fraud, operated Genesis Global Capital, which experienced a financial meltdown leading to customer assets being inaccessible.
NYDFS Superintendent Adrienne Harris emphasized that customers have a right to their entrusted assets, and as part of the settlement, Gemini is required to return a minimum of $1.1 billion to affected customers. Failure to comply with this obligation may result in further actions by the NYDFS.
Despite the ongoing legal proceedings, Gemini has expressed its commitment to advocating for customers and recovering their assets. If approved, the exchange estimates a total return of over $1.8 billion, exceeding the value lost when withdrawals were halted in November 2022. Additionally, Gemini will contribute $40 million to the conclusion of Genesis' bankruptcy proceedings to further benefit affected customers.