Gemini Cleared of Wrongdoing in Earn Program Collapse
An arbitrator has ruled that Gemini Space Station was not responsible for the collapse of its Earn lending program, dismissing claims that the exchange misled customers or failed to conduct adequate due diligence on its lending partner, Genesis Global Capital.
The ruling, issued August 12, found insufficient evidence to support a claim filed in late 2024 by a Gemini Earn customer seeking damages for emotional distress related to the program's failure. The arbitrator determined that the claimant had not established the elements necessary to support the claim, including a breach of duty by Gemini or a direct connection between the company's conduct and the alleged harm.
The decision instead pointed to Genesis and its parent, Digital Currency Group (DCG), as responsible for the problems that ultimately brought down Earn. Arbitrators described the alleged fraud at Genesis as extensive, saying it had gone undetected by the company's auditors, DCG's auditors, and regulatory authorities until Gemini uncovered it.
Gemini launched Earn in 2021, allowing customers to earn annual yields of as much as 7.4% by lending their digital assets through Genesis to institutional borrowers. The program was halted in November 2022 amid a broader crypto market liquidity crisis, prompting Gemini to suspend Earn withdrawals for more than 300,000 customers.