Gemini Trust Co. Strikes $1.1 Billion Deal with NYDFS to Compensate Earn Customers
The post Gemini Trust Co. Strikes $1.1 Billion Deal with NYDFS to Compensate Earn Customers appeared first on Coinpedia Fintech News
Gemini Trust Co. has agreed to return $1.1 billion to customers and pay a $37 million fine, marking a resolution with the New York Department of Financial Services (NYDFS) over the Gemini Earn program.
Let us read more to understand the terms and complexities of this NYDFS settlement.
NYDFS Announcement
On February 28, 2024, Superintendent Adrienne A. Harris of NYDFS announced the settlement, stating, “Today’s settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini.”
The settlement outlines Gemini’s promise to return at least $1.1 billion to Earn program customers through the Genesis Global Capital, LLC bankruptcy proceeding. Additionally, Gemini will contribute $40 million to the bankruptcy for the benefit of Earn customers.
Superintendent Harris emphasized Gemini’s failure to conduct due diligence on the unregulated third party, leading to massive fraud allegations and harm to the Earn program customers.
The Earn program, launched on February 1, 2021, allowed Gemini customers to loan their virtual currency to an unregulated third party, Genesis Global Capital (GGC). GGC defaulted on approximately $1 billion worth of loans in November 2022, leading to reputational and monetary harm for Gemini and affecting over 200,000 Earn customers.
Gemini’s Response and Updates
Gemini acknowledged the settlement in its Earn Updates, stating, “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 kind.”
In short, the settlement between Gemini Trust Co. and the NYDFS is still pending final approval and the required Bankruptcy Court process could take as long as two months to complete.
However, Gemini expressed optimism that if approved by the Bankruptcy Court, the settlement would result in all Earn users receiving 100% of their digital assets back in kind.
As part of the settlement, Gemini committed to returning over $1.8 billion in value at current prices, exceeding the amount when Genesis halted withdrawals in November 2022.
Earn users can expect to receive approximately 97% of their assets in kind within about two months, with the remaining balance delivered within the next 12 months.
In Short …
Gemini’s $1.1 billion settlement stands as a landmark chapter in the Gemini Earn Program saga. The settlement has been agreed upon after addressing all of compliance lapses, fraud allegations, and reputational damage, caused by Gemini during the program, and thereafter finally offering a path for Earn program customers to get their rightful compensations.
Filed under: Bitcoin - @ February 29, 2024 3:17 am