Gemini wins arbitration over Earn program collapse claims

Traders Union
All News
Financial News
Gemini Earn arbitration win

Highlights

An arbitrator ruled on Aug. 12 that Gemini was not liable for the Earn program collapse, citing insufficient evidence of misleading conduct or negligence.
Gemini settled with the New York Attorney General for $50 million in 2024 and reached an agreement with Genesis and creditors in February 2024.
In May 2024, Earn users recovered $2.18 billion—97% of owed assets and $1 billion above November 2022 values—while over a dozen legal disputes remain unresolved.

Arbitration ruling and program history

As reported by CNBC, an arbitrator said earlier in August that Gemini was not at fault for the collapse of its Earn lending program and did not mislead users about the product. The ruling, dated Aug. 12 and reviewed by CNBC, said there was insufficient evidence that the crypto exchange lied to customers or failed to conduct due diligence on Genesis Global Capital, its main lending partner.

The claim was brought by an Earn user in late 2024. In the decision, the arbitrator said the claimant had not met the standard required for a negligent infliction of emotional distress claim, including proof of a breached duty, emotional harm, a direct causal connection and circumstances showing the harm was genuine. The ruling added that the claimant offered no evidence of an actual or perceived threat to physical safety.

Gemini launched Earn in 2021, offering users yields of as much as 7.4% a year on crypto assets that were lent to institutional borrowers through Genesis. The program stopped withdrawals in November 2022, shortly after Genesis paused new loan originations and redemptions because of a liquidity crunch during that year’s crypto market slump.

Customer recoveries and remaining legal exposure

Gemini has faced multiple legal complaints since the withdrawal freeze, including action by the New York Attorney General, which settled with the company for $50 million in 2024. In February 2024, Gemini said it had reached a settlement in principle with Genesis and other creditors in the Genesis bankruptcy.

Three months later, Earn users received $2.18 billion of their digital assets in kind, equal to 97% of the digital assets owed to them and $1 billion more than the value at the time Genesis halted withdrawals in 2022. Even so, more than a dozen disputes from Earn customers were still ongoing as of earlier this month, indicating Gemini continues to face legal risk tied to the failed lending product.

Our earlier coverage on the Polymarket criminal case examined a growing legal fight over whether prediction-market event contracts should be treated as regulated swaps under the Commodity Exchange Act or as gambling outside federal commodities rules. The piece highlighted how conflicting court decisions and increasing political pressure could ultimately force a clearer definition of CFTC oversight for these products.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.