Good News for Gemini Earn Users

Gemini Earn users finally got a resolution to the “EARN” saga, as yesterday the crypto exchange resolved the ongoing dispute surrounding the defunct program.

The company reached a settlement with the New York Department of Financial Services (NYDFS), which guarantees full asset recovery for users affected.

As part of the settlement terms, Gemini has pledged to allocate $40 million to Genesis, the service provider for the Earn program, to assist in its ongoing bankruptcy proceedings. Additionally, the company has committed to paying $37 million to the NYDFS. In a bid to ensure timely restitution, Gemini has promised to have $1.1 billion available for its Earn customers by the conclusion of Genesis’s bankruptcy proceedings, pending approval from the bankruptcy court.

The Earn program, which allowed Gemini customers to earn interest on cryptocurrency investments, relied on backend services provided by Genesis. However, regulatory concerns arose when the NYDFS alleged that Gemini failed to conduct adequate due diligence on Genesis Global Capital, leading to legal action against the latter by the New York Attorney General’s office for fraud.

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Genesis’s filing for bankruptcy in January 2023 named Gemini as one of its major creditors. The subsequent suspension of customer withdrawals by Genesis significantly impacted Gemini Earn customers, with approximately $1 billion in defaulted loans affecting around 200,000 customers.

As part of the settlement, the NYDFS has retained the right to pursue legal action against Gemini if the $1.1 billion recovery commitment is not honored following the resolution of Genesis’s bankruptcy proceedings.