The New York State Attorney General's Office has obtained a nearly $50 million settlement with cryptocurrency exchange Gemini Trust Company, LLC (Gemini). This represents the latest development in a high-stakes lawsuit involving New York AG, Gemini, its former business partner Genesis Global Capital, and several other defendants.
Gemini has been banned from operating a cryptocurrency lending program
in press release on friday, New York Attorney General Letitia James announced the successful recovery of $50 million from Gemini aimed at compensating victims who lost money due to the popular stock exchange profiteering scheme.
James said that more than 230,000 investors, including 29,000 New Yorkers, were duped into investing in Gemini's Earn, an investment initiative run in collaboration with defunct cryptocurrency bank Genesis Global.
The Attorney General said:
Hundreds of thousands of people, including at least 29,000 New Yorkers, had their trust broken and their money cheated by Gemini through its fake Earn program. Gemini marketed its Earn program as a way for investors to grow their money, but in reality it lied and blocked investors from accessing their accounts.
Following Genesis' bankruptcy filings in November 2022, Gemini Earn collapsed, depriving investors of access to more than $900 million of their assets.
In October 2023, the New York Attorney General's Office filed a lawsuit against Gemini, Genesis, and its parent company Digitalcurrency Group (DCG), as well as DCG CEO Barry Silbert and former Genesis president Saichiro Moro.
Aside from Gemini's recent payment, this lawsuit also led to a $2 billion settlement deal with Genesis, the largest deal ever awarded by a state to a cryptocurrency company. As part of its deal, Gemini was also banned from operating any cryptocurrency lending business in New York. In addition, the Exchange is required to assist the New York AG in ongoing litigation against other defendants
Commenting on her recent victory, Letitia James said:
Today's settlement will leave defrauded investors intact and should remind cryptocurrency companies that defrauding investors is illegal and will not be tolerated by my office.
In the past few years, Attorney General Letitia James has gained a lot of attention in enforcing regulation in the cryptocurrency space. Notably, it has filed several lawsuits against defaulting cryptocurrency companies, including KuCoin and Nexo, winning settlements worth up to $22 million and $24 million, respectively.
Crypto market overview
In other news, this happened in the cryptocurrency market decreased By 1.05% in the last day, bringing the total market value to about $2.4 trillion. Among these numbers, Bitcoin remains the most dominant digital asset with a market capitalization of $1.4 trillion. Ethereum follows the market leader with a market capitalization of $445.27 billion, thus accounting for 18% of the cryptocurrency market.
Featured image from Bloomberg, chart from Tradingview