Gemini has committed to returning at least $1.1 billion to customers affected by its partnership with the now-bankrupt Genesis.
The company, founded by Tyler and Cameron Winklevoss, reached this agreement with the New York State Department of Financial Services, which also includes a $37 million fine. The arrangement pertains to a failed collaboration on Gemini’s Earn interest-bearing product, which saw customer assets frozen after Genesis halted withdrawals following the FTX collapse.
Currently, over 200,000 Earn customers are unable to access their digital currency, totaling at least $1.1 billion. Superintendent Adrienne Harris stated, “Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown.”
In a blog post, Gemini informed Earn users that they can expect to receive approximately 97% of their assets in kind within about two months, with the remainder expected within a year. Additionally, Gemini plans to contribute $40 million to Genesis’ bankruptcy proceedings to benefit affected Earn customers.
In October, New York Attorney General Letitia James filed a lawsuit against Gemini and Genesis’s parent company regarding the Earn product, while the SEC has also charged both firms with offering and selling unregistered securities.