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- GEMI
A legal arbitrator has ruled that cryptocurrency exchange Gemini (NASDAQ: $GEMI) cannot be held liable for the collapse of its Earn lending program.
Specifically, the arbitrator in the case said that Gemini, led by twin brothers Tyler and Cameron Winklevoss, did not mislead users and was not at fault for the failure of Earn lending.
The legal claim was filed by investors in 2024 following the lending program’s collapse. The arbitrator found insufficient evidence that Gemini lied to customers or failed to do due diligence.
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The arbitrator found that the Earn lending program failed largely due to “massive fraud” committed by Genesis, which had partnered with Gemini on the program.
Last year, Genesis agreed to pay the U.S. Securities and Exchange Commission (SEC) a fine of $38.5 million U.S. for misleading investors.
Launched in 2021, Earn allowed users to reap up to 7.4% in annual interest on their cryptocurrency holdings by lending them out.
Gemini lent the digital assets to institutional borrowers, using Genesis as its intermediary.
However, Gemini halted withdrawals from its Earn program in 2022, angering its more than 300,000 users. The move came after Genesis paused loan originations due to a liquidity crunch.
Following the Earn withdrawal freeze, investors brought a lawsuit against Gemini. The New York Attorney General also sued Gemini, settling with the company for a $50 million U.S. fine.
In February 2024, Gemini reached a settlement with Genesis and has since repaid $2.18 billion U.S. of digital assets in kind to investors, representing 97% of what was owed to Earn users.
GEMI stock has declined 87% since the company went public a year ago. The shares are currently trading at $4.30 U.S. each.
Source: finance.yahoo.com