Gemini has achieved a legal victory in a dispute over a lending project with Earn. The arbitrator concluded that the existing evidence is not sufficient to prove that the platform misled users or failed to fulfill its due diligence obligations when cooperating with Genesis Global Capital.

Earn Projects and Frozen Withdrawals

Earn was launched in 2021, allowing users to lend their crypto assets and earn up to a 7.4% annual return. Gemini is responsible for matching assets, and Genesis acts as an intermediary to lend them to institutional borrowers. In November 2022, Gemini stopped Earn withdrawals, which subsequently led to widespread dissatisfaction among users.

What do arbitrators think?

The ruling on August 12th, as seen by CNBC, indicated that the applicant's claims of emotional distress lacked evidence to support them. The ruling stated that the applicant did not provide evidence of an actual or perceived threat to personal safety, therefore the related claims were not established.

Subsequent disputes still persist.

After Earn stopped withdrawals, Gemini faced multiple user complaints. The Attorney General of New York State also filed a lawsuit against Gemini regarding this project, and the two parties reached a settlement of $50 million in 2024. In February of this year, Gemini announced a principled settlement with Genesis and other creditors, and in May, they returned $2.18 billion in digital assets to Earn users, which accounts for about 97% of the owed assets.