This latest development speaks of a remarkable $2 billion settlement with Genesis. In addition to resolving claims against Gemini, the settlement also imposes a ban on the company from operating any cryptocurrency lending program in New York.
In a major victory for investors, New York Attorney General Letitia James has successfully secured a staggering $50 million from cryptocurrency platform Gemini Trust Company, LLC (Gemini). This recovery will benefit over 230,000 investors, including a significant number of New Yorkers who fell victim to fraud while participating in the Gemini Earn program.
It has been revealed that Gemini misled these investors about the risks associated with the program, which was offered in collaboration with Genesis Global Capital (Genesis), another cryptocurrency company. The settlement reached ensures that all defrauded investors will receive full compensation for the assets they had invested in the Earn program but were unable to withdraw when the program collapsed. This is a significant step towards justice and restitution for those affected by this fraudulent scheme.
This latest development speaks of a remarkable $2 billion settlement with Genesis. In addition to resolving claims against Gemini, the settlement also imposes a ban on the company from operating any cryptocurrency lending program in New York. Furthermore, Gemini is now obligated to cooperate fully with the Office of Attorney General's litigation against Digital Currency Group (DCG), DCG's CEO Barry Silbert, and Genesis' former CEO Soichiro Moro.
“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,” said Attorney General James. “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.”
Under the terms of today's settlement, Gemini will be returning approximately $50 million worth of digital assets to the investors of Gemini Earn who were previously unable to access their accounts. The good news is that investors don't have to take any action to recover their digital assets, as they will soon be able to access them in their accounts once again.
In October 2023, Attorney General James filed a lawsuit against Gemini, accusing them of deceiving investors with false information about their Gemini Earn program. Despite repeatedly assuring investors that investing in Genesis through Gemini Earn was a safe and low-risk opportunity, an investigation conducted by the OAG revealed that Gemini's internal analysis showed the company's financials were actually quite risky.
The lawsuit alleged that Gemini was aware that Genesis' loans were not adequately secured and were heavily concentrated with one entity, Sam Bankman-Fried's Alameda, but failed to disclose this crucial information to investors. Just last month, Attorney General James successfully obtained $2 billion from Genesis to compensate the victims of this fraudulent scheme.
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