Arbitrator Clears Gemini Space Station of Earn Program Fault

An arbitrator ruled on August 12 that Gemini Space Station was not responsible for the collapse of its Earn lending program and did not deceive its users. The decision dismissed a late 2024 claim for emotional distress damages, concluding there was no evidence that the exchange neglected due diligence or misled customers.

The ruling attributed the program's failure to massive fraud perpetrated by Genesis Global Capital and its parent company, Digital Currency Group, led by Barry Silbert. Arbitrators noted that this fraud eluded both regulatory authorities and auditors until Gemini discovered it.

Launched in 2021, the Earn program allowed users to earn yields by lending assets through Genesis. Gemini froze withdrawals for roughly 300,000 users in November 2022 following a liquidity crunch at Genesis. While Gemini settled a separate lawsuit with the New York Attorney General for $50 million in 2024, it has returned 97% of digital assets to Earn users as of May 2024. More than a dozen customer disputes remain ongoing.