New York Attorney General Letitia James is settling with crypto exchange Gemini over fraud allegations for $50 million.
In a new press release, James says she’s recovered $50 million worth of digital assets on behalf of 230,000 investors allegedly defrauded through Gemini’s Earn program, which had the firm partnering up with crypto lender Genesis to provide staking rewards.
However, Genesis ended up going bankrupt in 2022 and thus Gemini could not pay back customers what it owed them.
In 2023, James launched an investigation into Gemini and found that the company knew Genesis’ loans were “under-secured and at one point highly concentrated with one entity” but failed to disclose this information to investors.
As stated by James,
“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.
Gemini marketed its Earn program as a way for investors to grow their money, but actually lied and locked investors out of their accounts.
Today’s settlement will make defrauded investors whole and should remind cryptocurrency companies that deceiving investors is illegal and will not be tolerated by my office.”
In a new thread on the social media platform X, Gemini acknowledged the settlement and told customers that they would receive 100% of the crypto assets owed to them.
“Today, we are pleased to announce that final Earn distributions – representing the remaining 3% of the 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 final distribution, Earn users will have received 100% of the assets owed to them.”
Last month, Genesis also settled with James for a staggering $2 billion, the largest crypto settlement to date in the state’s history.
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