Gemini has agreed to pay a large fine to a financial regulator in New York for failing to comply with regulations. They are also required to return at least $1.1 billion to customers who used their lending program, Gemini Earn.
The program, which was launched in 2021 and run by the Winklevoss twins-led company, allowed customers to lend their cryptocurrency to Genesis Global Capital, LLC in exchange for an annual return of up to 7.4%.
The settlement, announced by the New York State Department of Financial Services (NYDFS) on Wednesday, is the latest development in the legal troubles surrounding the Gemini Earn program.
According to Adrienne Harris, Superintendent of NYDFS, Gemini failed to conduct proper due diligence on Genesis Global Capital, which later was found to be involved in a large-scale fraud.
This resulted in harm to the customers of Gemini Earn, who were suddenly unable to access their assets when Genesis Global Capital experienced financial troubles.
