In a recent decision that marks a turning point for cryptocurrency company Gemini, founded by the renowned Winklevoss twins, a settlement has been reached with the New York Department of Financial Services (DFS). This agreement concerns the Gemini Earn product, whose operations have faced significant challenges, attracting the attention of regulatory authorities.
The core of this settlement involves Gemini agreeing to pay a fine of $37 million, as well as promising to fully refund the funds owed to its customers for the Earn product, which total more than a billion dollars. This gesture is part of a consent decree that aims to compensate those affected by the instability of the service offered.
“Gemini failed to perform due diligence with an unregulated third party, who was later accused of committing large-scale fraud, negatively impacting Earn customers who were left unable to access their assets following the financial collapse of Genesis Global Capital,” stated Adrienne Harris, DFS investigator. This oversight failure contributed to the difficulties faced by investors, who saw their assets become inaccessible.
The Earn program, launched by Gemini, a platform primarily known for its exchange operations, proposed a tempting offer: allowing customers to lend their cryptocurrencies in exchange for returns of up to 13%. Genesis, part of Barry Silbert’s Digital Currency Group, was the only counterparty in this arrangement.
However, the situation became more complicated when Genesis began lending cryptocurrencies to entities such as hedge fund Three Arrows Capital and FTX-affiliated Alameda Research. The subsequent collapse of these firms led to the inability of Earn customers to recoup their cryptocurrency investments.
Disclaimer:
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.
Source: https://portalcripto.com.br/gemini-compromete-se-a-devolver-mais-de-us-1-bilhao-aos-clientes-apos-acordo/
