Jun 14, 2024 - Economy

NYAG recovers $50M in settlement with Gemini, cooperation against former Earn partner

Crystal Kim

NY AG Letitia James — Attorney General Letitia James speaks during a press conference. Photo: Michael M. Santiago

New York Attorney General Letitia James on Friday said the state recovered $50 million in a settlement agreement with crypto exchange Gemini that will be returned to Gemini Earn customers involved in a multi-firm bankruptcy proceeding.

The intrigue: As part of the agreement, Gemini has agreed to cooperate in the $3 billion fraud case against its former partner Genesis, the now defunct lender's former chief Soichiro "Michael" Moro, as well as Genesis parent Digital Currency Group and founder and chief Barry Silbert.

Catch up quick: New York sued Gemini in October for allegedly lying to investors about its Gemini Earn product, a suit which involved Genesis and DCG.

Earn customers' previously frozen funds are being returned, but the long-simmering beef between Gemini founders Cameron and Tyler Winklevoss and DCG's Silbert, is hardly over.

The NYAG lawsuit, which was amended in February, alleges the group defrauded investors of more than $3 billion. It cites internal documents at Gemini in arguing that the exchange knew that Genesis Capital posed "high risk."

Not to mention Cameron Winklevoss regularly penned angry missives against the company's former partners and went after Silbert directly — calling for his removal from DCG as chief.

As part of the settlement, Gemini is banned from operating any crypto lending program in the state.

The bottom line: "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," James said in a press statement.

Add Axios on Google

NYAG recovers $50M in settlement with Gemini, cooperation against former Earn partner

What to read next