Gemini, a crypto exchange launched in 2015 by twins Cameron and Tyler Winklevoss as part of the Gemini Trust Company, has “committed” to return $1.1 billion to customers of its failed Earn program, the New York State Department of Financial Services announced in a press release on its official site on Wednesday. 

“Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown,” New York State Superintendent Adrienne A. Harris said in the release. 

Gemini will also pay a $37 million fine to the DFS for “significant failures that threatened the safety and soundness of the company.”

Per a statement published today on Gemini’s web site, the settlement will “result in all Earn users receiving 100% of their digital assets back in kind.”

‘Up to 7.4% APY’

The much-vaunted Gemini Earn program, launched in 2021, had been touted as a high-yield investment vehicle, whereby customers would earn interest based on deposits of various cryptocurrencies—in fact, “up to 7.4% APY,” they claimed in a February 2, 2021 press release announcing the product. 

Earn’s counterparty was Genesis Global Capital (GGC), which the DFS release described as “an unregulated third party that was not licensed by the Department,” adding, “GGC then loaned those same assets to its own counterparties.” 

Read More: Victims’ Fund for Genesis Creditors Could Set a Major Precedent in Crypto Bankruptcy Cases, If Approved

Genesis, in turn, was one of many heavily exposed financial institutions that collapsed following the implosion of FTX, which rocked the financial world in late 2022. Genesis filed for Chapter 11 bankruptcy in New York in January 2023.

The DFS announcement comes four months after New York Attorney General Letitia James filed a lawsuit against Gemini, Genesis, and venture capital group DCG for “defrauding” investors, in the words of a statement from James’ office issued on October 19, 2022, adding that Gemini had “repeatedly lied to investors” about Earn.

Earlier this month, Genesis settled its lawsuit against the NYAG although the deal must still be approved by a bankruptcy judge. Also in February, the NYAG’s office expanded its lawsuit against DCG, increasing the size of its alleged fraud from $1.1 billion to $3 billion. 

Read More: Gemini Sues Former Partner Genesis to Gain Control of $1.6 Billion in GBTC