Gemini Settles Fraud Allegations with $50 Million Payment

Gemini Settles Fraud Allegations with $50 Million Payment

Gemini Settles Fraud Allegations with $50 Million Payment

Cryptocurrency exchange Gemini has agreed to pay $50 million to settle allegations of misleading investors about the risks of its Gemini Earn program. The settlement, announced by New York Attorney General Letitia James, requires Gemini to return approximately $50 million in digital assets to investors who were unable to access their accounts when the program collapsed. Additionally, Gemini will be barred from operating a crypto lending program in New York.

The lawsuit, filed in October 2023, accused Gemini of making false and misleading statements about the safety and security of the Earn program. The program, which promised high returns on deposited cryptocurrency, was marketed as a low-risk investment. However, the program was not insured and investors lost access to their funds when the program collapsed in November 2023.

"Hundreds of thousands of people, including at least 29,000 New Yorkers, had their trust broken and their money swindled by Gemini through its bogus Earn program," James said in a statement. "This settlement sends a strong message to the cryptocurrency industry that we will hold them accountable for their misconduct."

The settlement is the latest in a series of actions taken by James against the cryptocurrency industry. In January 2023, James secured a $2 billion settlement against Genesis Trading, the largest crypto settlement in New York history.

The Gemini settlement is a significant development in the ongoing scrutiny of the crypto industry by regulatory authorities. It serves as a reminder to crypto companies that they must be truthful and transparent with investors about the risks of their products and services. The settlement also highlights the risks associated with crypto lending programs, which have come under increased regulatory scrutiny in recent times.