Crypto exchange Gemini will return nearly $1.1 billion to customers of its Earn investment program. The development comes even as Bitcoin (BTC-USD) hits new muti-year highs this month. Gemini was co-founded by the Winklevoss twins, who are known for waging a legal battle against Mark Zuckerberg, the CEO of Meta Platforms (NASDAQ:META), for stealing their idea of a social network platform. The lawsuit lasted four years and eventually ended with a $65 million settlement in 2008.
According to the New York State Department of Financial Services, the crypto exchange failed to maintain oversight over Genesis Global, its partner in the Earn program. Under Earn, customers could loan their holdings to Genesis and receive interest payments.
According to the Wall Street Journal, Genesis’ bankruptcy left nearly 200,000 Earn users unable to access their holdings. The financial regulator also flagged deficiencies in Gemini’s compliance programs. Under its settlement, Gemini plans to fully return the cryptocurrencies owed to Earn users. The exchange has also been handed a fine of nearly $37 million.
Last year, Gemini and Genesis were also sued by the U.S. Securities and Exchange Commission (SEC) over violations of investor protection laws. Notably, Gemini’s Earn program was halted in November 2022 amid a crash in the crypto market. However, since then, Bitcoin has rallied from a low of about $16,000 to the present $62,400 level.
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