Gemini exchange has reached an agreement with Genesis and the New York State Department of Financial Services (NYDFS) for the reimbursement of $1.1 billion to Gemini Earn customers: payment in cryptocurrencies.
The agreement entails the return to users of the Earn program of all digital assets held on the exchange, not their dollar value at the time of the lending program suspension. The refund would be at least $1.1 billion based on current prices. The Earn program was operated in collaboration with Genesis, a cryptocurrency lending company now bankrupt.
After reaching the agreement, Gemini stated:
“This means, for example, that if you had lent one bitcoin in the Earn program, you will receive one bitcoin back as part of this settlement.”
In January 2023, two months after the collapse of FTX, Genesis declared bankruptcy, freezing the assets belonging to Gemini Earn customers.
NYDFS supervisor Adrienne A. Harris explained that Gemini did not conduct adequate due diligence on Genesis before their partnership. As part of the agreement, Gemini will also pay a fine of $37 million for multiple compliance errors that threatened the security and stability of the company.
NYDFS emphasized that further action will be taken against the exchange if it fails to fulfill its commitments.
Following this agreement, users involved in the Earn program will see the reimbursement of 97% of their assets within two months. The remaining 3% will be distributed over the following 12 months.
