Crypto Firm Reaches Settlement After Lending Disaster

Popular cryptocurrency exchange Gemini Trust will return over $1.8 billion to customers affected by the failure of its digital asset lending program. Gemini Earn was marketed as a low-risk way for users to earn interest lending out their crypto. But the company had to halt withdrawals in November amid the massive industry-wide crash.

Winklevoss Twins on the Hook

Cameron and Tyler Winklevoss, Gemini’s celebrity co-founders, are on the hook to make customers whole. The twins are best known for their legal feud with Mark Zuckerberg over Facebook’s origins, which netted them a $65 million settlement. Now the New York regulator says their crypto lending promises put Gemini at risk of collapse.

$37 Million Fine for Deception

In addition to full repayment of customer assets with interest, Gemini must pay a $37 million penalty to state authorities. The settlement leaves the door open for further sanctions if the Winklevosses fail to reimburse lendors. Separately, Gemini still faces a lawsuit alleging it deceived investors and concealed major losses.

Mishap Threatens Winklevoss Ambitions

For the famous twins who bet big on crypto’s potential, the Gemini disaster jeopardizes their ambitions as industry leaders. While they avoided harsher punishment, the episode forced Gemini into a costly settlement and ongoing legal woes instead of future expansion.