New York Attorney General Letitia James has secured approximately $50 million from cryptocurrency platform Gemini Trust Company, LLC (Gemini) for over 230,000 investors, including at least 29,000 New Yorkers. These investors were involved in the Gemini Earn program and were defrauded. Gemini allegedly misled investors regarding the risks associated with the investment program it offered in collaboration with another cryptocurrency company, Genesis Global Capital (Genesis).
The settlement ensures full recovery of assets for all defrauded investors who could not withdraw their investments when the program collapsed. This resolution follows a previous $2 billion settlement with Genesis and addresses claims against Gemini. It also bans Gemini from operating any cryptocurrency lending programs in New York and requires cooperation with ongoing litigation against Digital Currency Group (DCG), DCG’s CEO Barry Silbert, and Genesis’ former CEO Soichiro Moro.
“Hundreds of thousands of people, including at least 29,000 New Yorkers, had their trust broken and their money swindled by Gemini through its bogus Earn program,” said Attorney General James. “Gemini marketed its Earn program as a way for investors to grow their money but actually lied and locked investors out of their accounts. Today’s settlement will make defrauded investors whole and should remind cryptocurrency companies that deceiving investors is illegal and will not be tolerated by my office.”
Under this agreement, Gemini will return approximately $50 million worth of digital assets to affected Gemini Earn investors without requiring any action on their part. Investors will regain access to these digital assets within their accounts.
In October 2023, Attorney General James sued Gemini for misleading investors about the risks associated with its Earn program. Despite assurances that investing through this program was low-risk, an investigation revealed that internal analyses indicated otherwise. The lawsuit claimed that Gemini knew about the risky financials of Genesis' loans but did not disclose this information to investors.
Attorney General James continues to encourage New Yorkers who have been deceived by cryptocurrency companies to report these issues to her office. She also urges industry workers who may have witnessed misconduct or fraud to file an online whistleblower complaint anonymously if necessary.
James has taken significant actions against other entities in the cryptocurrency sector as well. Recently she filed a lawsuit against AWS Mining, NovaTechFX, and its founders for defrauding immigrant communities out of $1 billion. In December 2023, she secured more than $22 million from KuCoin for failing to register properly as a securities broker-dealer and misrepresenting itself as a crypto exchange.
Other notable actions include securing $4.3 million from Coin Cafe in May 2023 for similar registration failures and recovering $24 million from Nexo in January 2023 alongside a multistate coalition for operating illegally.
This matter was managed by Assistant Attorneys General Geoffrey Andreu, John Ruth, Stephanie Torre; Attorney General Fellow Shelbi Molin; Senior Enforcement Counsel Gabriel Tapalaga; Principal Accountant Shalendra Ramadhin; Legal Assistant Eddie Aguilar; Detective Investigator Frank Tirri; Data Analyst Anushua Choudhury under Acting Deputy Director Gautam Sisodia's supervision; Director Victoria Khan; Bureau Chief Shamiso Maswoswe; Deputy Bureau Chief Kenneth Haim; Chief Deputy Attorney General Chris D’Angelo overseeing the Division of Economic Justice under First Deputy Attorney General Jennifer Levy's oversight.
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