Gemini Trust, owned and controlled by the Winklevoss twins, has settled with the New York State Department of Financial Services (DFS), committing to return $1.1 billion to the Earn customers, 100 percent of their locked-up holdings.
Settlement amid Monetary Commitments
Announced yesterday (Wednesday), Gemini will further contribute $40 million towards the bankruptcy proceedings of Genesis, which provided services for the Earn program. Under the settlement, another $37 million will go to the New York regulator as a penalty for “significant failures that threatened the safety and soundness of the company.”
“Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown,” said the Superintendent of the DFS, Adrienne Harris.
“Today’s settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini.”
Earn Update: Today, we are pleased to announce that we have finally reached a settlement in principle with Genesis and other creditors in the Genesis Bankruptcy that will, if approved by the Bankruptcy Court, result in all Earn users receiving 100% of their digital assets back in…
— GeminiTrustCo (@GeminiTrustCo) February 28, 2024
A Questionable Scheme
Under the Earn program, customers received interest against their digital assets, which were loaned to other customers. Gemini received the digital assets from the Earn customers and loaned them to Genesis, which later lent the assets to other counterparties. The program was launched in February 2021 and attracted over 200,000 customers, including about 30,000 New Yorkers.
The DFS has already settled fraud charges against now-bankrupt Genesis. That settlement ensured that assets about to go to the state regulator would be returned to former Earn customers and other Genesis creditors instead. Genesis also had to return its BitLicense and exit operations in the state.
The New York regulator further pointed out that apart from the Earn program, Gemini’s “unsafe and unsound practices” also threatened the company’s financial health. The investigation found that an unregulated affiliate of Gemini collected “hundreds of millions of dollars in fees from Gemini customers,” ultimately weakening the company’s financial stability.
If, under the latest settlement, Gemini fails to return the proceeds to Earn customers, the DFS will take further action against the company. Gemini has further committed to working through Genesis’ bankruptcy process to ensure full recovery of Earn customers’ assets.
Gemini Trust, owned and controlled by the Winklevoss twins, has settled with the New York State Department of Financial Services (DFS), committing to return $1.1 billion to the Earn customers, 100 percent of their locked-up holdings.
Settlement amid Monetary Commitments
Announced yesterday (Wednesday), Gemini will further contribute $40 million towards the bankruptcy proceedings of Genesis, which provided services for the Earn program. Under the settlement, another $37 million will go to the New York regulator as a penalty for “significant failures that threatened the safety and soundness of the company.”
“Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown,” said the Superintendent of the DFS, Adrienne Harris.
“Today’s settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini.”
Earn Update: Today, we are pleased to announce that we have finally reached a settlement in principle with Genesis and other creditors in the Genesis Bankruptcy that will, if approved by the Bankruptcy Court, result in all Earn users receiving 100% of their digital assets back in…
— GeminiTrustCo (@GeminiTrustCo) February 28, 2024
A Questionable Scheme
Under the Earn program, customers received interest against their digital assets, which were loaned to other customers. Gemini received the digital assets from the Earn customers and loaned them to Genesis, which later lent the assets to other counterparties. The program was launched in February 2021 and attracted over 200,000 customers, including about 30,000 New Yorkers.
The DFS has already settled fraud charges against now-bankrupt Genesis. That settlement ensured that assets about to go to the state regulator would be returned to former Earn customers and other Genesis creditors instead. Genesis also had to return its BitLicense and exit operations in the state.
The New York regulator further pointed out that apart from the Earn program, Gemini’s “unsafe and unsound practices” also threatened the company’s financial health. The investigation found that an unregulated affiliate of Gemini collected “hundreds of millions of dollars in fees from Gemini customers,” ultimately weakening the company’s financial stability.
If, under the latest settlement, Gemini fails to return the proceeds to Earn customers, the DFS will take further action against the company. Gemini has further committed to working through Genesis’ bankruptcy process to ensure full recovery of Earn customers’ assets.
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- Source: https://www.financemagnates.com//cryptocurrency/winklevoss-twins-gemini-commits-to-return-11-billion-to-earn-customers/
