Gemini Trust has reached a substantial settlement exceeding $50 million with the New York Attorney General's office, marking a resolution to a lawsuit filed in October 2023. The lawsuit alleged that Gemini defrauded approximately 230,000 investors, including 29,000 New Yorkers, through its Earn program in collaboration with Genesis Global Capital.

The Attorney General accused Gemini of misleading investors about the risks associated with the Earn program, which purported to offer a means for investors to grow their assets but allegedly resulted in funds being inaccessible to users.

New York Attorney General Letitia James emphasized that Gemini's marketing of the Earn program misrepresented the security and accessibility of investor funds. The settlement, which follows a similar $2 billion agreement with Genesis Global Capital, requires Gemini to compensate affected users fully within seven days and prohibits the exchange from operating cryptocurrency lending programs within the state.

This legal action is part of a broader effort by the Attorney General's office to enforce compliance within the cryptocurrency industry. Prior lawsuits targeted other prominent figures and entities, including former Celsius CEO Alex Mashinsky and KuCoin. Mashinsky is currently facing criminal charges in the Southern District of New York and is slated to go to trial in January 2025.

The settlement underscores the increasing regulatory scrutiny facing cryptocurrency platforms, highlighting the importance of transparency and adherence to financial regulations. It serves as a reminder to the industry of the consequences of failing to adequately disclose risks and protect investor interests.