New York, USA – The cryptocurrency exchange Gemini Trust, founded by Cameron and Tyler Winklevoss, has agreed to return over $1.1 billion to customers of its defunct lending program as part of a settlement with the New York Department of Financial Services. The exchange will also pay a $37 million fine for what regulators deemed significant failures compromising the company’s stability.
Under the terms of the settlement, customers of Gemini’s lending program, Gemini Earn, will receive a full refund of their digital assets along with any increase in their value. This move comes after the suspension of withdrawals by Genesis Global Capital, the firm to which customers lent their crypto assets through the Gemini Earn program.
Gemini’s troubles are far from over, as it is currently embroiled in a separate lawsuit filed by New York’s attorney general. The lawsuit, initiated in October, accuses Gemini, Genesis Global Capital, and Digital Currency Group, the parent company of GGC, of deceiving investors and concealing losses totaling over $1 billion.
The Winklevoss twins, known for their legal battle against Meta’s Mark Zuckerberg over the creation of Facebook, have now found themselves at the center of another high-profile financial dispute. The settlement reached with the NYDFS represents a significant step towards addressing the issues plaguing Gemini’s lending program and ensuring the return of funds to impacted customers.
Meanwhile, in the volatile world of cryptocurrency, the collapse of FTX, a prominent exchange, has sent shockwaves through the market, leading to repercussions felt by other industry players like Gemini. The ongoing legal challenges faced by Gemini underscore the regulatory scrutiny surrounding the cryptocurrency sector and the need for increased transparency and accountability.
As the saga unfolds, with Gemini working to fulfill its obligations under the settlement and navigate the complexities of legal proceedings, the future of the exchange and its founders remains uncertain. The resolution of these issues will not only impact the affected customers but also shape the broader landscape of cryptocurrency regulation and oversight.