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The New York State Department of Financial Services announced a settlement with Gemini on Wednesday.\u00a0<\/p>\n
The firm will \u201creturn at least $1.1 billion\u201d to customers of the Gemini Earn Program through the Genesis bankruptcy proceeding.\u00a0<\/p>\n
\u201cIn furtherance of that commitment, Gemini will contribute $40 million to the GGC bankruptcy for the benefit of Earn customers in coordination with the Bankruptcy Court,\u201d said<\/a> the New York finance regulator.<\/p>\n Read more: <\/strong>DCG calls NYAG, Genesis settlement agreement \u2018subversive\u2019<\/a><\/p>\n Additionally, Gemini<\/a>, co-founded by Cameron and Tyler Winklevoss, will pay the DFS $37 million penalty for failures that \u201cthreatened the safety and soundness of the company.\u201d<\/p>\n The NYDFS<\/a> said it could bring further action against the company if it doesn\u2019t fulfill its obligations.\u00a0<\/p>\n \u201cGemini 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,\u201d said Superintendent Adrienne Harris.\u00a0<\/p>\n In a post on its website, Gemini said that all Earn users will receive \u201c100% of their digital assets back in kind\u201d as part of a settlement in principle with Genesis and other creditors. The settlement is not finalized and needs to be approved by a bankruptcy court.\u00a0<\/p>\n If the settlement is approved, then \u201cEarn users can expect to receive approximately 97% of their assets in kind within about two months,\u201d Gemini said<\/a>.\u00a0<\/p>\n Genesis<\/a> and its parent company, Digital Currency Group, went to court this week<\/a> to argue cases for and against the proposed bankruptcy plan submitted by Genesis last year.\u00a0<\/p>\n Sean O\u2019Neill, a lawyer for Genesis, argued on Monday that DCG should not \u201ccome in and take a cut\u201d of customer assets.<\/p>\n Creditors, under the Genesis plan, could see recoveries up to 77%. DCG<\/a> argued that the plan is not legal under bankruptcy laws because it \u201cfavors\u201d some creditors<\/a>. DCG wants the customer claims to be based on the price of cryptocurrencies back when Genesis filed for bankruptcy in early 2023.<\/p>\n Additionally, the two are at odds concerning a settlement with the New York Attorney General.\u00a0<\/p>\n The NYAG sued Genesis, DCG and Gemini late last year, alleging that the three conspired on \u201cfraudulent schemes\u201d<\/a> related to the Gemini Earn program. The NYAG is seeking $3 billion in restitution<\/a> from Gemini and DCG.\u00a0<\/p>\n