New York's Attorney General to secure $50 million settlement from Gemini, cryptocurrency platform.
In a significant move for the cryptocurrency industry, the New York Attorney General (NY AG) Letitia James has secured a settlement of $50 million in digital assets from Gemini Trust Co. The settlement follows allegations that Gemini misled over 230,000 investors, causing losses surpassing $1 billion.
The settlement, which was publicly documented in a June 14 consent order, requires Gemini to pay the recovery to investors who were unable to withdraw from the Gemini Earn program when it collapsed. This final 3% of assets owed to Earn investors will be received by June 21.
The Gemini Earn program, which allowed Gemini customers to loan their crypto assets to Genesis Global Capital (GGC) and earn interest, operated from February 2021 to November 2022. However, the program collapsed when Genesis Global Capital defaulted on roughly $1 billion in loans to Earn customers after FTX went bankrupt.
The settlement bans Gemini from operating a crypto lending company in New York. Moreover, Gemini is permanently banned from offering any crypto lending products within the state. The settlement also requires Gemini to cooperate with ongoing investigations involving Genesis Global Capital and Digital Currency Group, other defendants accused of fraud in connection to the Gemini Earn program.
James' investigation revealed that Gemini knew about problems with Genesis' financials, including undersecured loans and concentration with FTX sister company Alameda Research. The settlement requires Gemini to cooperate with James' legal case against Digital Currency Group, DCG CEO Barry Silbert, and Genesis' former CEO Soichiro Moro.
The lawsuit focused on claims that Gemini falsely advertised the Gemini Earn product as a low-risk, highly liquid investment and misrepresented the creditworthiness of Genesis. The $50 million settlement with Gemini forms part of broader enforcement actions in the crypto space by NY AG Letitia James, including a related $2 billion settlement with Genesis that resulted in full recovery for users impacted by the Earn program.
Gemini tweeted excitement about delivering full recovery to investors, stating, "We are excited to announce that we have reached a settlement with the New York Attorney General's office, and we are committed to delivering full recovery to our Earn program investors." At least 29,000 of the defrauded investors are New Yorkers.
The settlement is intended to remind cryptocurrency companies that deceiving investors is illegal and will not be tolerated by the New York Attorney General's office. It serves as a clear message that regulatory scrutiny of misleading practices in crypto lending products will continue.
As a result of the settlement, Gemini Earn investors will be able to access their crypto assets in their accounts without needing to take any action. The recovery is intended to pay these investors who were allegedly defrauded by Gemini's Earn program. The settlement does not specify any changes or requirements related to retail, payments, regulations & policy, or technology.
[1] New York State Department of Financial Services, "In the Matter of the Gemini Trust Company, LLC," June 14, 2025. [2] New York State Office of the Attorney General, "New York State Attorney General Letitia James Announces $2 Billion Recovery for Cryptocurrency Users in Settlement with Genesis Global Capital," March 15, 2023.
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