New York City -Attorney General Letitia James of New York announced on Friday that she had successfully retrieved $50 million from the cryptocurrency platform Gemini Trust to reimburse investors who had been duped through its Gemini Earn scheme.
Gemini, which is led by the wealthy twin brothers Cameron and Tyler Winklevoss, has agreed to prohibit the operation of cryptocurrency loan programs in the state and will reimburse all of the more than 230,000 Earn investors, including 29,000 in New York, in full.
James also revealed on May 20 that she had reached a $2 billion settlement with cryptocurrency lender Genesis Global Capital.
James claimed that despite lying to investors and locking them out of their accounts, Gemini had portrayed its Earn program as a means for them to grow their money. "Investors who were duped will be made whole by today's settlement."
Investors were informed on Friday by Gemini that the monies would be available in seven days. It stated, "Earn users will have gotten 100% of the assets owed to them with this final payout."
Gemini Earn offered investors who lent cryptocurrency assets, such bitcoin, to Genesis, a division of Digital Currency Group, substantial interest rates in exchange for fees that might surpass 4%.
Genesis stopped redemptions in November 2022, just after Sam Bankman-Fried's cryptocurrency exchange, FTX, collapsed, freezing over $1 billion. Two months later, Genesis filed for Chapter 11 bankruptcy.
By deciding to settle, Gemini did not acknowledge or refute any wrongdoing. Gemini was penalized $37 million in February by New York's top financial regulator for noncompliance.
Because they are being compensated in digital assets like bitcoin, whose value has more than tripled since redemptions were delayed, investors are anticipated to recover more than they invested.
Additionally, Gemini consented to assist James' October fraud case against Digital Currency Group and its CEO, Barry Silbert. Her assertions have been deemed unfounded by them.
When contacted for comment regarding Gemini's settlement, representatives of Digital Currency Group did not immediately answer.
Forbes magazine estimated the Winklevoss twins' combined net worth to be $2.7 billion.
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