A screen displays an image of Gemini co-founders Tyler Winklevoss and Cameron Winklevoss, and the Gemini logo, during the company’s IPO at the Nasdaq MarketSite, in New York City, U.S., Sept. 12, 2025.
Jeenah Moon | Reuters
Gemini Space Station secured a significant legal win in August when an arbitrator determined that the cryptocurrency exchange did not mislead users and was not responsible for the failure of its Earn lending initiative.
The arbitration case, initiated in late 2024 by a user of Gemini’s digital asset lending service Earn, concluded that there was inadequate evidence to suggest Gemini had deceived its customers or failed in its oversight responsibilities regarding Genesis Global Capital, its primary lending partner, as reported by CNBC.
The August 12 ruling emphasized the stringent requirements for proving negligent infliction of emotional distress: “To prevail in such a claim, a petitioner must demonstrate: (i) a breach of duty owed to the petitioner; (ii) emotional damage; (iii) a direct causal link between the breach and the emotional harm; and (iv) circumstances that affirm the authenticity of the claimed harm.” The arbitrator noted that the claimant provided no evidence of any actual or perceived threat to personal safety.
Instead, the ruling shifted focus to Genesis, operated by Digital Currency Group’s Barry Silbert, citing “extensive” fraudulent activities. Silbert faces multiple multibillion-dollar lawsuits alleging investor fraud. In the previous year, DCG settled with the Securities and Exchange Commission for $38.5 million over misleading investors.
“The magnitude of the Silbert/ DCG/Genesis fraud was enormous and remained concealed until Gemini uncovered it, bypassing detection by Genesis’, DCG’s auditors, and various regulatory bodies,” the arbitrator stated.
Silbert and DCG did not provide comments to CNBC regarding the matter.
Introduced in 2021, Earn enabled users to earn up to 7.4% annual returns on their cryptocurrencies by lending them out. The program operated by Gemini lending user assets to institutional borrowers through Genesis as an intermediary.
In November 2022, Gemini suspended withdrawals from its Earn program, prompting frustration among its over 300,000 users. This action followed Genesis’ halt on new loan issuances and redemptions due to liquidity challenges during the crypto market downturn that year.
In the wake of the Earn withdrawal suspension, numerous customers initiated legal proceedings against Gemini. The New York Attorney General also pursued litigation against the company over the Earn program, ultimately settling for $50 million in 2024.
In February 2024, Gemini announced a preliminary settlement with Genesis and other creditors involved in the Genesis bankruptcy. By May, Earn users had received $2.18 billion in digital assets, accounting for 97% of the funds owed and exceeding the amount frozen when Genesis halted withdrawals in 2022 by $1 billion.
Despite these resolutions, over a dozen legal disputes related to Earn continue to target Gemini, as noted in recent reports.
— CNBC’s Talia Kaplan contributed to this reporting.
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