Gemini Trust has settled a significant lawsuit with the New York Attorney General's office, agreeing to pay over $50 million to resolve allegations related to its Earn program. The settlement, announced on June 14 by Attorney General Letitia James, stems from a lawsuit filed in October 2023 accusing Gemini of defrauding investors, including 29,000 New Yorkers, through its Earn program in partnership with Genesis Global Capital.

The Attorney General's office asserted that Gemini misled investors about the risks associated with the Earn program, which purported to offer ways for investors to grow their assets but allegedly locked users out of their accounts and failed to disclose critical information. This settlement follows a similar agreement with Genesis Global Capital in May, where Genesis agreed to pay $2 billion to defrauded investors.

As part of the settlement, Gemini is prohibited from operating any cryptocurrency lending programs in New York state going forward. Attorney General James emphasized that all affected Earn program users, totaling approximately 230,000 individuals, will receive full restitution of their assets. Gemini Trust has committed to returning "100% of the assets owed to them" within seven days.

The legal action against Gemini and Genesis represents a significant effort by the New York Attorney General's office to crack down on alleged fraud within the cryptocurrency industry. The lawsuit continues against Digital Currency Group, its CEO Barry Silbert, and former Genesis CEO Soichiro Moro, highlighting ongoing regulatory scrutiny in the sector.

The settlement underscores the regulatory challenges faced by crypto firms operating in New York, as Attorney General James remains committed to pursuing justice and restitution for affected investors. Gemini's compliance with the settlement terms will be closely monitored, reflecting the heightened regulatory environment surrounding digital asset platforms in the state.

In related legal actions, Attorney General James has pursued cases against other crypto firms, including Celsius and KuCoin, signaling a broader crackdown on alleged illegal activities within the industry. Alex Mashinsky, former CEO of Celsius, faces criminal charges in New York and is slated to stand trial in January 2025, further underscoring the regulatory landscape's complexity and its implications for crypto businesses.