The New York State Attorney General’s Office has obtained a settlement of approximately $50 million with crypto exchange Gemini Trust Company, LLC (Gemini). This is the latest development in a high-stakes lawsuit involving 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 Friday, New York Attorney General Letitia James announced the successful recovery of $50 million from Gemini, intended to compensate victims who lost money due to the exchange’s popular earnings program.
James said more than 230,000 investors, including 29,000 New Yorkers, were duped into investing in Gemini’s Earn, an investment initiative run in conjunction with defunct crypto lender Genesis Global.
The Attorney General said:
Hundreds of thousands of people, including at least 29,000 New Yorkers, have had their trust broken and their money defrauded by Gemini through its fake Earn program. Gemini marketed its Earn program as a way for investors to grow their money, but in reality it lied and locked investors out of their accounts.
Following Genesis’ bankruptcy filing in November 2022, the Gemini Earn program collapsed, denying investors access to more than $900 million of their assets.
In October 2023, the New York Attorney General’s Office filed a lawsuit against Gemini, Genesis and its parent company Digital Currency Group (DCG), as well as DCG CEO Barry Silbert and the former boss of Genesis, Saichiro Moro.
In addition to Gemini’s recent payment, this lawsuit also resulted in the $2 billion settlement agreement with Genesis, the largest ever granted to a cryptocurrency company by a State. As part of its deal, Gemini was also barred from operating a crypto lending company in New York. Additionally, the grant is needed to assist New York AG in ongoing litigation against other defendants.
Commenting on her most recent victory, Letitia James said:
Today’s settlement will restore integrity to defrauded investors and should serve as a reminder to cryptocurrency companies that deceiving investors is illegal and will not be tolerated by my office.
Over the past few years, Attorney General Letitia James has attracted a lot of attention in enforcing regulations in the crypto space. Notably, she has launched several lawsuits against crypto companies considered to be failing, including KuCoin and Nexo, winning settlements to the tune of $22 million and $24 million respectively.
Crypto Market Overview
Furthermore, the crypto market has decreases by 1.05% over the past day, bringing the total market capitalization to approximately $2.4 trillion. Among these numbers, Bitcoin remains the most dominant digital asset with a market capitalization of $1.4 trillion. The market leader is followed by Ethereum with a market capitalization of $445.27 billion, thus accounting for 18% of the crypto market.
Featured image from Bloomberg, chart from Tradingview
