United States of America: Issued ruling in Department of Financial Services investigation concerning Gemini Trust Company's compliance failures

On 28 February 2024, the New York State Department of Financial Services (DFS) and the Gemini Trust Company, LLC (Gemini) reached a settlement in the investigation into Gemini’s alleged compliance failures. Gemini made a commitment to return at least USD 1.1 billion to its Earn Program customers, a program through which the customers could loan their virtual currency to Genesis Global Capital, LLC (GGC). The DFS found that Gemini had failed to conduct due diligence on GGC, thereby failing to prevent harm suffered by Earn customers due to alleged fraud by the unregulated third-party GGC. Gemini will contribute USD 40 million to the GGC bankruptcy for the benefit of Earn customers and pay a USD 37 million fine to DFS for significant compliance failures. The DFS retains the right to take further action against Gemini if it fails to fulfil its obligation to return the funds to Earn customers after the resolution of the GGC bankruptcy.