Gemini Earn Lawyer – Gemini Earn Lawsuit
Nadrich & Cohen is representing those who lost money because of the Gemini Earn crash.
Cryptocurrency exchange and lending platform Gemini recently collapsed. Investors in Gemini lost a ton of money.
Lawsuits allege that Gemini hid risks from investors. Lawsuits also claim Gemini offered unregistered securities to investors.
Lawsuits allege that Gemini defrauded investors. Fraud victims have a right to compensation.
Call us today for a free consultation if you lost money because of Gemini Earn’s collapse. You can also text us from this page. We won’t charge you a fee unless and until we recover compensation for you. We’ll handle every step of obtaining compensation for you. This will save you paperwork, travel and time. We’ll recover the compensation you deserve as fast as possible.
What Happened To Gemini Earn?
Gemini is a cryptocurrency exchange and lending platform. It sold interest accounts to investors through its Gemini Earn platform. Investors also lent cryptocurrency to Gemini through Gemini Earn in exchange for interest.
Federal law considers these interest accounts to be securities. Gemini did not register them as securities as they needed to under the law, though.
Gemini also hid risks from investors in Gemini Earn. Many of these investors lost a lot of crypto assets when the program collapsed.
Gemini saw its launch announced in 2013. Gemini saw a public release in 2015. It ended up becoming one of the largest crypto companies in the U.S.
Gemini launched Gemini Earn in 2021. It advertised to customers that it partnered with “vetted and accredited” borrowers. Gemini Earn actually only had a single lending partner, though: Genesis.
Genesis was in a state of financial distress in 2022. July 2022 reports mentioned Genesis suffered “hundreds of millions” in financial losses. These losses were due to Genesis’ exposure to Three Arrows Capital. Three Arrows had filed for bankruptcy by that time.
Gemini didn’t tell its investors its sole lending partner was in financial trouble. It even continued to try to lure in new investors.
Genesis also had financial troubles due to the May 2022 collapse of Terraform Labs. Terraform, a blockchain company, withdrew $100 million worth of its own crypto in May 2022. This was a withdraw from a liquidity pool. Volatility in the pool increased. Traders took advantage, converting hundreds of millions of dollars worth of Terraform’s crypto. Other traders panicked and started liquidating their own assets from Terraform.
Terraform and its crypto suffered a sudden collapse. The collapse caused financial harm to Genesis and Three Arrows Capital. The harm done to Three Arrows further damaged Genesis. This is because Three Arrows had borrowed a lot of Bitcoin from Genesis.
Genesis CEO Michael Moro resigned after Three Arrows collapsed. Gemini then reshuffled its staff, cutting 10 percent of it. Much of the reshuffling occurred in Gemini’s risk and compliance teams.
Gemini and Genesis looked like they had made it through OK by August 2022. The FTX collapse in November 2022 changed everything, though.
In November 2022, Genesis revealed it had over $175 million in assets frozen on FTX. FTX filed for bankruptcy shortly after. Genesis halted loan redemptions and new loans on the same day. Gemini suspended customer withdrawals from Gemini Earn on the same day.
What Is The Problem?
Customers with Gemini Earn have been unable to withdraw their assets since November 16, 2022. Genesis owes customers $900 million. Genesis’ parent company Digital Currency Group, Inc. owes Genesis $1.675 billion. Genesis has deposited $175 million in FTX. The result is a “liquidity issue.”
Gemini, on November 11, 2022, stated it was not exposed to FTT tokens, Alameda or FTX. Their statement failed to provide warnings or disclosures to Gemini Earn customers.
However, customer deposits can actually be followed directly to FTX. Customers deposited money into Gemini Earn, which lent $900 million to Genesis, which deposited $175 million in FTX.
November 11, 2022
Gemini tells its customers they were not exposed to FTX. The statement claimed Gemini wasn’t exposed to FTX, Alameda or FTT tokens. The statement failed to mention it didn’t apply to Gemini Earn deposits.
November 16, 2022
Gemini Earn pauses all customer withdrawals. Few updates have been provided to the public since. Gemini claimed the pause was because of a duration mismatch regarding liquidity in terms of Genesis’ liabilities and assets. In other words, Gemini lending partner Genesis borrowed a ton of money against customer assets, and its liabilities are greater than its assets, meaning it is insolvent.
November 21, 2022
Gemini updates its website, blaming FTX for its decision to pause customer withdrawals. This contradicted its earlier statement that Gemini wasn’t exposed to FTX. Gemini blamed its decision to pause customer withdrawals on “the FTX collapse” and “market turmoil,” signaling that Gemini Earn’s customers were exposed to FTX. Media reports subsequently stated that Genesis had deposited $175 million into FTX.
Why Are There Gemini Earn Lawsuits?
Lawsuits looks to recover compensation from Gemini and others, claiming that:
Gemini Offered Customers Unregistered Securities
Gemini offered investors interest-earning accounts. Lawsuits claim these accounts constituted unregistered securities. These securities needed registration with the SEC.
The purchases of these accounts were contracts between Gemini and customers. These contracts are null and void because of the securities’ unregistered status. Those who bought the accounts may void the accounts. They qualify for recessionary damages relating to buying the accounts.
Gemini Hid Risks From Investors
Lawsuits allege Gemini hid risks from its investors. They claim Gemini defrauded investors by hiding the risks. Investors qualify for compensation for fraud.
Gemini would have had to provide a registration statement upon registering its securities. This statement was never made because its securities weren’t registered.
This statement would have needed to contain:
- A description of the account in “plain English”
- A list of risk factors
- A description of incentives and information about management
- Warnings about the reliance on forward-looking claims
- An explanation about account proceed usage
Lawsuits claim Gemini hid risks from investors by not registering their securities.
Lawsuits also claim Gemini made many misleading statements to investors, including:
- They promised customers could always redeem their assets. Gemini stated on its website that customers could redeem their assets “at any time.” They stated their partners, “in all cases,” must honor customer requests to return funds. They stated this must occur within five days of customer request. They then suspended customer withdrawals in November 2022.
- They claimed to have more than one lending partner. Gemini stated on its website it borrowed from “accredited third-party borrowers.” They stated they “vetted” these “borrowers.” Lawsuits claim Gemini actually only had one borrowing partner: Genesis. Lawsuits allege Gemini failed to vet Genesis’ financial stability. It is obvious that having more than one lending partner increases financial stability. Lawsuits claim Gemini tried to make its finances look more stable than they were.
- They claimed Genesis’s finances were sound. Gemini head of risk Yusuf Hussain, in February 2021, called Genesis’ loans “overcollateralized.” Genesis’ collapse was swift following the collapses of Three Arrows and FTX, though. Lawsuits claim Gemini mislead investors about how stable Genesis’ finances were.
Can I Join A Gemini Earn Class Action Lawsuit?
We are representing victims of Gemini Earn on a contingency. This means we won’t charge a fee until we win your case. We won’t charge a fee unless we win your case.
In other words, we will never charge you an out-of-pocket fee. We will never charge you an upfront fee.
A class action lawsuit against Gemini Earn exists. This lawsuit looks to recover money for those who invested in Gemini Earn. It claims Gemini defrauded and deceived investors.
Nadrich & Cohen can assist you with joining the Gemini class action lawsuit. Joining a class action isn’t always the correct choice for those who suffer losses, though. Some can recover more compensation by filing an individual lawsuit instead.
Call us today so we can let you know if joining the Gemini Earn class action lawsuit is a good idea for you. You can also find out if filing an individual lawsuit is a better idea. Nadrich & Cohen can file an individual lawsuit for you if this is the case.
What Can A Gemini Earn Lawyer At Nadrich & Cohen Do For Me?
Have you invested in Gemini Earn? Are you now unable to recover your investments because of customer withdrawal suspension? If so, Nadrich & Cohen might have multiple options to assist you in recovery.
We can hold Gemini accountable and make them pay the compensation you deserve. Call us for a free consultation or text us from this page.
Contact us even if you’re not sure about the details. We can let you know if legal remedies are available to you.
Our legal team will quickly respond to any inquiries. We are here to help. We will devote our considerable resources to quickly securing complete, fast justice for you. We won’t charge you any out-of-pocket fees.
We may be able to help if you haven’t been able to withdraw your Gemini Earn assets.
Your free, no obligation case evaluation is only a phone call away.