New York Attorney General Letitia James has settled with crypto exchange Gemini over fraud allegations for $50 million.
In a new press release, James says she has recovered $50 million worth of digital assets on behalf of 230,000 investors who were allegedly defrauded through Gemini’s Earn program, where the company partnered with cryptocurrency lender Genesis to provide staking rewards.
However, Genesis went bankrupt in 2022, meaning Gemini was unable to pay back customers what it owed them.
In 2023, James launched an investigation into Gemini and discovered that the company knew Genesis’ loans were “undersecured and at one point highly concentrated in one entity” but did not disclose this information to investors.
As James says,
“Hundreds of thousands of people, including at least 29,000 New Yorkers, have had their trust betrayed and their money defrauded by Gemini through its bogus Earn program.
Gemini marketed its Earn program as a way for investors to grow their money, but in reality lied and locked investors out of their accounts.
Today’s settlement will bring healing to defrauded investors and should remind cryptocurrency companies that misleading investors is illegal and will not be tolerated by my office.”
In a new thread on social media platform X, Gemini acknowledged the settlement and told customers they would receive 100% of the crypto assets owed to them.
“Today we are pleased to announce that the final Earn distributions – which represent the remaining 3% of digital assets owed to you as of the suspension date (November 16, 2022) – will be available in your Gemini account within seven days. With this latest distribution, Earn users will have received 100% of the assets owed to them.”
Last month, Genesis also settled with James for a whopping $2 billion, the largest crypto settlement to date in state history.
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Generated image: Midjourney