Gemini Space Station won a legal ruling in August, with an arbitrator finding that the crypto exchange did not mislead users and was not responsible for the collapse of its Earn lending program, CNBC reported. The claim was brought in late 2024 by a user of the digital-asset lending product. The ruling said there was not enough evidence to show Gemini lied to customers or was negligent in its due diligence on Genesis Global Capital, its main lending partner in the program. Launched in 2021, Earn offered users annual yields of up to 7.4% by lending out crypto assets. Gemini suspended withdrawals from the program in November 2022, shortly after Genesis halted new loan originations and redemptions during a liquidity crisis tied to that year’s crypto market downturn. After the freeze, multiple customers filed legal complaints against Gemini. The New York attorney general also sued the company over Earn and reached a $50 million settlement in 2024. In February 2024, Gemini said it had reached an agreement in principle with Genesis and other creditors in the Genesis bankruptcy case. Three months later, Earn users received $2.18 billion in digital assets in kind, equal to 97% of the digital assets owed to them and $1 billion more than when Genesis froze withdrawals in 2022.
Gemini Space Station secured a legal win in August, with an arbitrator ruling that the crypto exchange did not mislead users and was not responsible for the collapse of its Earn lending program, according to CNBC.
The claim was filed in late 2024 by a user of the digital-asset lending program. Under the ruling, there was not sufficient evidence to show that Gemini lied to customers or failed in its due diligence on Genesis Global Capital, the program’s main lending partner.
How the Earn program worked
Gemini launched Earn in 2021, offering users annual yields of up to 7.4% for lending out their cryptocurrencies. Under the structure of the program, Gemini lent assets to institutional borrowers, using Genesis as the intermediary.
In November 2022, Gemini halted withdrawals from Earn, a move that angered some of the program’s more than 300,000 users. The suspension came shortly after Genesis stopped new loan originations and redemptions because of a liquidity crisis linked to the crypto market downturn that year.
Complaints, settlement and repayments
After withdrawals were frozen, multiple customers filed legal complaints against Gemini. The New York attorney general also sued the exchange over the Earn program and reached a $50 million settlement with the company in 2024.
In February 2024, Gemini said it had reached an "agreement in principle" with Genesis and other creditors in the Genesis bankruptcy case. Three months later, Earn users received $2.18 billion in digital assets in kind, representing 97% of the digital assets owed to them and $1 billion more than the value at the time Genesis froze withdrawals in 2022.
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