Regulation
Gemini Trust Settles $50 Million Settlement with New York AG to Repay Deceived Investors
What’s going on here?
The New York Attorney General has secured a $50 million recovery from the Gemini Trust to compensate defrauded investors through its Gemini Earn program. This deal affects over 230,000 investors, including 29,000 in New York.
What does this mean?
Gemini Trust, run by billionaire twins Cameron and Tyler Winklevoss, marketed the Earn program as a safe investment avenue. But the program locked investors out of their accounts when Genesis Global Capital, the associated lender, stopped repayments after FTX collapsed in November 2022. Genesis filed for Chapter 11 bankruptcy in January 2023. As part of the agreement, Gemini agreed to cease operating cryptocurrency lending programs in New York. This $50 million deal follows a related $2 billion deal between New York AG and Genesis in May 2024. Importantly, investors will receive payments digitally resources like bitcoin, which has more than tripled in value since refunds were suspended.
Why should I care?
For markets: Cryptocurrency regulation tightens its grip.
The resurgence highlights the growing scrutiny and regulatory actions faced by the cryptocurrency sector. New York’s crypto lending settlement bans highlight how state-level interventions can reshape market practices. Companies in this space should prepare for tougher regulations in response to high-profile collapses and fraudulent activity.
The bigger picture: Clear skies for some after the storm.
The payment will ensure that more than 230,000 investors, including 29,000 in New York, receive full recoveries, potentially even exceeding their initial investments due to bitcoin’s tripled value. This resolution not only provides financial relief, but also instills cautious optimism and increased vigilance among investors when engaging with digital asset programs in the future.