The New York State Attorney General’s Office has secured a settlement of approximately $50 million with the crypto exchange Gemini Trust Company, LLC (Gemini). This marks the latest development in a high-stakes lawsuit involving the New York AG, Gemini, its former business partner Genesis Global Capital, and several other defendants.
Gemini Banned From Running Crypto Lending Program
In a press release on Friday, New York Attorney General Letitia James announced the successful recovery of $50 million from Gemini targeted at compensating victims who lost money to the exchange’s popular earn program.
James stated that over 230,000 investors, including 29,000 New Yorkers were deceived into investing in Gemini’s Earn, an investment initiative run collaboratively with defunct crypto lender Genesis Global.
The attorney General said:
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.
Following the bankruptcy filings of Genesis in November 2022, the Gemini Earn program collapsed, denying investors access to over $900 million worth of their assets.
In October 2023, the New York Office of the Attorney General filed a lawsuit against Gemini, Genesis, and its parent company Digital Currency Group (DCG), as well as DCG’s CEO Barry Silbert and former Genesis boss Saichiro Moro.
Aside from the recent payment by Gemini, this lawsuit has also resulted in the $2 billion settlement deal with Genesis, the largest ever granted to a cryptocurrency firm by a state. As part of its deal, Gemini has also been prohibited from operating any crypto lending company in New York. In addition, the exchange is required to assist the New York AG in the ongoing litigations against other defendants
Commenting on her most recent victory, Letitia James said:
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 the past few years, Attorney General Letitia James has gained much attention in enforcing regulation in the crypto space. Notably, she has launched several lawsuits against perceived defaulting crypto companies including KuCoin, and Nexo winning settlements to the tune of $22 million and $24 million respectively.
Crypto Market Overview
In other news, the crypto market has declined by 1.05% in the last day, bringing the total market cap to around $2.4 trillion. Of the figures, Bitcoin remains the most dominant digital asset with a market cap of $1.4 trillion. The market leader is followed by Ethereum with a market cap of $445.27 billion thus accounting for 18% of the crypto market.
Featured image from Bloomberg, chart from Tradingview
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