Crypto exchange Gemini has settled with the New York Department of Financial Services (NYDFS) to reimburse approximately $1.1 billion to its Gemini Earn customers. The customers could not withdraw their funds around the same time that crypto exchange FTX collapsed.
The NYDFS has clarified that it will pursue additional measures against the exchange if it fails to meet its commitments.
Gemini To Repay Gemini Earn Customers
Gemini customers enrolled in the Gemini Earn program to earn increased interest rates by locking up their crypto assets. However, the now-defunct crypto lending platform Genesis facilitated the financial framework behind this program.
Just three months following the collapse of FTX in November 2022, Genesis declared bankruptcy, freezing assets belonging to Gemini Earn customers.
Read more: Gemini vs. Coinbase: Everything You Need To Know
In a statement on February 28, Superintendent Harris of the NYDFS clarified that Gemini neglected to conduct thorough due diligence on Genesis, before their partnership for the Genesis Earn Program. Gemini attributed the collapse to Genesis.
“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.”
This is a developing story.
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