Images of Gemini co-founders Tyler Winklevoss and Cameron Winklevoss and the Gemini logo appear on a screen during the company’s IPO on the Nasdaq Market site in New York City, U.S., September 12, 2025.
Gina Moon | Reuters
gemini space station An arbitrator won a legal victory in early August, finding that the cryptocurrency exchange did not mislead users and was not responsible for the collapse of the Earn financing program.
The complaint was filed in late 2024 by a user of the digital asset company’s lending program Earn. But the ruling, seen by CNBC, said there was insufficient evidence to show that Gemini lied to customers or failed to conduct due diligence with its major lending partner, Genesis Global Capital.
The Aug. 12 ruling stated, “To successfully bring a claim for negligence inflicting emotional distress, a plaintiff must demonstrate (i) a breach of a duty to the plaintiff, (ii) psychological harm, (iii) a direct causal connection between the breach and the psychological harm, and (iv) circumstances that provide some assurance of the genuineness of the harm.” “In this case, Plaintiff presented no evidence of an actual or perceived threat to his personal safety.”
Instead, the arbitrators pointed to Genesis, run by digital currency group Barry Silbert, alleging “massive” fraud on its part. Mr. Silbert is facing a multibillion-dollar lawsuit for allegedly defrauding investors. Last year, DCG agreed to pay $38.5 million to the Securities and Exchange Commission for misleading investors.
“The scope of Silbert/DGC/Genesis’ fraud was extensive and undetected by Genesis and DCG’s auditors and various regulators until the fraud was discovered by Gemini,” the arbitrator said.
Silbert and DCG did not respond to CNBC’s requests for comment.
Launched in 2021, Earn allowed users to earn up to 7.4% annual yield by lending their cryptocurrencies. Under this program, Gemini used Genesis as an intermediary to lend assets to institutional investors.
However, Gemini stopped withdrawals from its Earn program in November 2022, angering some of its more than 300,000 users. The move comes shortly after Genesis suspended new loan originations and redemptions as it faced a liquidity crunch amid the crypto market downturn that year.
Following Earn’s withdrawal freeze, several customers filed legal complaints against Gemini. The New York State Attorney General also sued Gemini over the Earn program and settled with the company for $50 million in 2024.
In February 2024, Gemini announced that it had reached an “in-principle settlement” with Genesis and other creditors in the Genesis bankruptcy. Three months later, Earn users received $2.18 billion in digital assets in kind. This represents 97% of the digital assets owed by Earn users and $1 billion more than when Genesis suspended withdrawals in 2022.
As of earlier this month, more than a dozen disputes targeting Gemini brought by Earn customers were still active.
— CNBC’s Talia Kaplan contributed reporting.
