Gemini just caught a meaningful legal break. An arbitrator has ruled that Gemini Trust Company bears no responsibility for the collapse of its Earn lending program, the product that promised users yields of up to 7.4% APY before everything went sideways in late 2022.
The ruling matters because the collapse was genuinely painful. When Genesis Global Capital, the partner that Gemini routed customer funds through, suspended redemptions in November 2022, roughly 340,000 users found themselves locked out of approximately $940 million to $1 billion in digital assets.
How the Earn program unraveled
Gemini launched its Earn product in February 2021, at the height of crypto’s lending boom. The pitch was straightforward: deposit your Bitcoin, Ether, or other assets, and Gemini would route them to Genesis Global Capital, which would pay interest in return.
The problem was the counterparty. Genesis Global Capital operated as the actual lender in this arrangement, and when the crypto credit crisis accelerated following FTX’s collapse in November 2022, Genesis could not meet its obligations. On November 16, 2022, GGC halted redemptions, effectively locking Earn customers out of their funds. Gemini terminated the Earn program entirely in January 2023, but the damage was already done.
