Gemini Trust Co., the crypto exchange founded by twin entrepreneurs Cameron and Tyler Winklevoss, will return at least $1.1 billion to customers though the Genesis Global Capital bankruptcy as part of settlement with the New York Department of Financial Services, Bloomberg News reported. The New York-based firm will also pay a $37 million fine for various compliance failures to the New York Department of Financial Services, Superintendent Adrienne A. Harris said in a statement Wednesday. Gemini is returning the funds to customers who lost money through the Gemini Earn program that the exchange ran together with now-bankrupt lender Genesis Global. Gemini also agreed to contribute $40 million to Genesis’s bankruptcy for the benefit of Earn customers in coordination with the bankruptcy court. “Gemini 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,” Harris said. “Today’s settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini.” The Earn program, which was launched in early 2021, let more than 200,000 Gemini users — including almost 30,000 New Yorkers — lend out their coins through Genesis for yield. Genesis stopped withdrawals in late 2022, and filed for bankruptcy in early 2023. Gemini failed to conduct ongoing due diligence into Genesis, or to maintain adequate reserves throughout the running of Earn, the department said.
