Cryptocurrency firm Gemini has been directed to refund $1.1 billion to its customers, following a settlement reached with the New York Department of Financial Services (NYDFS). In addition to customer reimbursement, the company has also been instructed to pay a $37 million fine for 'significant failures.'

Gemini and Genesis were indicted by US regulators for their part in the unlawful sale of cryptocurrency assets to hundreds of thousands of investors in January 2023. As reported by Yahoo News, the companies violated the law by selling products through the Earn platform, which was introduced in 2021. "Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown," stated NYDFS Superintendent Adrienne Harris.

The Earn program was terminated in November 2022 shortly before Genesis declared bankruptcy. A BBC news article reported that this resulted in 340,000 customers being affected. Following the bankruptcy declaration, there has been ongoing litigation between Genesis, Gemini and Digital Currency Group aimed at resolving the disservice caused to consumers. According to Gemini CEO Winklevoss, Digital Currency Group owes his company's customers over $900 million.

Gemini Earn positioned itself as a low-risk investment that allowed customers to lend cryptocurrency assets to Genesis while receiving interest payments up to 8%. Around the same time as crypto exchange company FTX filed for bankruptcy, Genesis suspended customer withdrawals citing insufficient liquid assets due to market volatility. The former CEO of FTX, Sam Bankman-Fried is awaiting sentencing for his role in misappropriating billions of consumer funds. He potentially faces a maximum sentence of 110 years; however, his lawyers have submitted a memo seeking five to seven years as per a CNN news report.