New York Attorney General Retrieves $50M from Gemini for Investors; Bans Future Crypto Lending
Summary:
The New York Attorney General's office has successfully reclaimed over $50 million from Gemini to repay to investors affected by the platform's Earn program. The settlement resolves a lawsuit filed against Gemini for alleged fraudulent actions affecting 230,000 investors. This follows a similar settlement requiring Genesis to pay $2 billion to defrauded investors. The legal battle continues against Digital Currency Group, CEO Barry Silbert, and former Genesis CEO Soichiro Moro. The settlement also bans Gemini from running any crypto lending platforms in New York.
The Office of the Attorney General in New York has reclaimed over $50 million from Gemini, the funds of which are due to be returned to participants of the platform's Earn program. In a declaration on June 14, Attorney General Letitia James of New York revealed that the sum of $50 million puts to rest a legal confrontation that her office and Gemini first embarked upon in October 2023. The claim was that Gemini had duped 230,000 investors, including those residing in New York, by inadequately reporting the perils associated with its collaboration with Genesis Global Capital via its Earn scheme.
Letitia James remarked, “Gemini, with its fraudulent Earn scheme, disillusioned and swindled the funds of hundreds of thousands of people, which regrettably involved at least 29,000 New Yorkers. Gemini touted its Earn plan as a profitable route for investors, but resorted to untruths and unfairly denied investors access to their accounts.”
In the preceding month, a comparable agreement with Genesis had been reached by James’ office, compelling the company to repay $2 billion to investors whose funds had been wrongfully appropriated by the Earn scheme. The Office of the New York Attorney General clarified that these settlements were exclusive to Genesis and Gemini and that the litigation against Digital Currency Group, its Chief Executive Officer Barry Silbert, and Soichiro Moro, the past CEO of Genesis, would persist.
Additionally, the resolution prohibits Gemini from administering any digital currency lending platforms in the state of New York. James announced that all swindled individuals will recoup their losses fully from Gemini. The Gemini Trust gave assurances that those affected by the Earn operation can anticipate full restitution of their assets within the following week. Other crypto organizations purportedly operating unlawfully in New York are also under scrutiny, with legal action being initiated by the office of James against Alex Mashinsky, the past CEO of Celsius, and KuCoin in 2023. A trial pertaining to criminal charges against Mashinsky in the Southern District of New York is scheduled for January 2025.
Published At
6/14/2024 9:14:58 PM
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