Letitia James Scores New $50m Win
Attorney General of New YorkLetitia James Cspeaks during the Celebrate Israel Parade on Fifth on June 02, 2024 in New York City.
Cryptocurrency platform Gemini Trust agreed on Friday to return $50 million to customers who invested into the failed investment program Gemini Earn to resolve a lawsuit brought forward by New York Attorney General Letitia James.
It is a massive victory for James, who had sued the company in October over its handling of the program, accusing Gemini of lying to its customers about the risk of it. The win is also a relief for more than 230,000 investors—including 29,000 New Yorkers—who will be reimbursed by the crypto platform.
"We recovered $50 million from cryptocurrency platform Gemini for defrauding hundreds of thousands of investors," James wrote on X on Friday. "Everyone that Gemini deceived will get their money back."
The settlement follows another recent victory for James, who had sued crypto platform Genesis Trading over allegedly lying to customers about how risky the investment in Gemini Earn, which it offered with Gemini, was.
"Gemini worked with crypto platform Genesis Trading and lied to people about the risk of their investments, and last month, we secured $2 billion from Genesis for its role in this scheme," James wrote on X. "We'll continue to crack down on crypto companies that don't play by the rules."
Newsweek contacted Gemini and Genesis for comment by email on Saturday morning.
An update by the New York Attorney General's Office said that the settlement agreed on Friday "provides all defrauded investors full recovery of the assets they invested in the Earn program but were unable to withdraw when the investment program collapsed." Eligible investors do not need to take any action to recover their digital assets, but will receive them in their accounts.
The $2 billion settlement with Genesis also bans Gemini from operating any cryptocurrency lending program in New York.
"Hundreds of thousands of people, including at least 29,000 New Yorkers, had their trust broken and their money swindled by Gemini through its bogus Earn program," said James in a news release on Friday.
"Gemini marketed its Earn program as a way for investors to grow their money, but actually lied and locked investors out of their accounts," added James. "Today's settlement will make defrauded investors whole and should remind cryptocurrency companies that deceiving investors is illegal and will not be tolerated by my office."
Gemini Earn was a crypto lending program that promised high interest rates to Gemini customers who lent their crypto assets to third-party borrower Genesis. The now-defunct program then froze the assets for months before now agreeing to return them to customers.
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