Crypto exchange Gemini not at fault for collapse of Earn lending program, arbitrator says
An arbitrator earlier this month said Gemini Space Station did not mislead users of its Earn program.
A legal arbitrator has concluded that cryptocurrency exchange Gemini is not responsible for the collapse of its Earn lending program. According to the arbitrator, Gemini did not deceive users and was not at fault for the program's failure. The lawsuit was initiated by investors in 2024, following the program's collapse. The arbitrator concluded that there was not enough evidence to support the claim that Gemini misled customers or neglected due diligence.
The arbitrator found that the collapse of the Earn lending program was primarily due to significant fraud committed by Genesis, a partner of Gemini in the program. In 2022, Genesis settled with the U.S. Securities and Exchange Commission (SEC) for $38.5 million for misleading investors. Gemini ceased withdrawals from its Earn program in 2022 after Genesis paused loan originations due to a liquidity crunch.
This decision angered over 300,000 users of the program. In February 2024, Gemini settled with Genesis and repaid $2.18 billion in digital assets, which accounted for 97% of what was owed to Earn users. Since Gemini's public debut a year ago, its stock has dropped by 87%, currently trading at $4.30 per share.
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