Gemini Wins Arbitration Support: Not Liable for Earn Lending Program Collapse

According to CNBC, Gemini Space Station secured a legal victory in August, with an arbitrator ruling that the cryptocurrency exchange did not mislead users and bears no responsibility for the collapse of its Earn lending program. The claim was filed in late 2024 by a user of the digital asset company's lending program Earn. Based on the ruling, there was insufficient evidence to prove that Gemini lied to customers or was negligent in its due diligence with its primary lending partner, Genesis Global Capital. The Earn program, launched in 2021, allowed users to earn annual yields of up to 7.4% by lending out cryptocurrencies. Under the program, Gemini lent assets to institutional borrowers, with Genesis acting as an intermediary. However, Gemini suspended withdrawals from the Earn program in November 2022, angering some of its more than 300,000 users. The move came shortly after Genesis paused new loan issuance and redemptions due to a liquidity crisis triggered by that year's crypto market downturn. Following the Earn withdrawal freeze, multiple customers filed legal complaints against Gemini. The New York Attorney General also sued Gemini over the Earn program, reaching a $50 million settlement with the company in 2024. In February 2024, Gemini announced it had reached an "agreement in principle" with Genesis and other creditors in the Genesis bankruptcy case. Three months later, Earn users received $21.8 billion in digital assets in kind, equivalent to 97% of the digital assets owed to Earn users, and $1 billion more than when Genesis suspended withdrawals in 2022.