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Arbitrator Clears Gemini of Misconduct in Earn Program Collapse
Finance · Investment Banks/Brokers · cnbc · 2026-08-31
GEMI
An arbitrator has ruled that Gemini did not mislead users regarding its Earn lending program, rejecting claims of negligence following the platform's 2022 freeze.
What Happened
Legal Ruling Details: An arbitrator recently determined that Gemini is not liable for the collapse of its Earn lending program, finding no evidence that the exchange misled its customers. The ruling specifically addressed a claim of negligent infliction of emotional distress, noting that the claimant failed to provide proof of a genuine threat to physical safety.
Background of the Earn Program: Launched in 2021, the Earn product allowed users to generate yields of up to 7.4% by lending assets through Genesis Global Capital. The program faced significant turmoil in November 2022 when Genesis halted operations due to a liquidity crunch, leading Gemini to freeze customer withdrawals.
Settlement and Recovery Efforts: Gemini previously reached a $50 million settlement with the New York Attorney General regarding the Earn program. Furthermore, the company successfully facilitated the return of $2.18 billion in digital assets to Earn users in May 2024, covering 97% of the outstanding balances.
Ongoing Litigation Landscape: Despite the favorable arbitration outcome, Gemini continues to face more than a dozen active legal disputes from former Earn customers. The company maintains that it acted in good faith and continues to navigate the aftermath of the broader crypto market downturn that impacted its lending partners.