AGS NEWS – Gemini Trust, a cryptocurrency exchange established by Cameron and Tyler Winklevoss, has reached a settlement with a New York regulator, agreeing to reimburse at least $1.1 billion to customers affected by its defunct lending program.

As part of the settlement, Gemini will also pay a $37 million fine to the New York Department of Financial Services (NYDFS) for what the regulator described as “significant failures jeopardizing the company’s stability.”

ALSO READ: Cryptocurrency money laundering decreases by $9 billion, according to report

The NYDFS emphasized its authority to pursue further action against Gemini should the company fail to fulfill its commitments outlined in the settlement agreement.

Gemini, led by the Winklevoss twins known for their legal battles with Meta’s Mark Zuckerberg over Facebook’s origins, announced the resolution in a blog post on Wednesday.

The exchange pledged to return 100% of customers’ digital assets from its lending program, Gemini Earn, along with any appreciation in value.

Gemini Earn, marketed as a low-risk investment opportunity offering up to 8% interest payments, allowed customers to lend crypto assets to Genesis Global Capital (GGC).

According to Gemini’s blog post, the restitution amounts to over $1.8 billion at current prices, exceeding the value at the time GGC suspended withdrawals in November 2022 during a turbulent period in the crypto market triggered by the collapse of FTX exchange.

FTX co-founder Sam Bankman-Fried, convicted in November on multiple counts of fraud and conspiracy, faces a recommended prison sentence of five to six-and-a-half years. Bankman-Fried’s sentencing is scheduled for March 28.

ALSO READ: Bitcoin reaches eight-month high, stands at $45,000

Despite the settlement, Gemini remains entangled in legal challenges.

The exchange is the subject of a lawsuit filed by New York’s attorney general in October, alleging deception and concealment of over $1 billion in losses involving Gemini, GCC, and Digital Currency Group, GCC’s parent company.