Arbitrator says Gemini was not at fault in Earn collapse

An arbitrator has ruled that Gemini did not mislead customers and was not responsible for the collapse of its Earn lending program, according to a decision reviewed by CNBC. The claim was filed in late 2024 by a user of Earn, which let customers lend crypto assets through Gemini and Genesis Global Capital. The ruling said there was not enough evidence that Gemini lied to users or failed to do proper due diligence on Genesis, its main lending partner. The decision instead pointed to Genesis and its parent Digital Currency Group, saying the fraud tied to the lender was large and went undetected by auditors and regulators for some time. Gemini froze Earn withdrawals in November 2022 after Genesis paused redemptions during a liquidity crunch. The dispute is part of a broader set of legal cases tied to the collapse of the lending program. Gemini later reached a settlement in principle in Genesis bankruptcy proceedings, and Earn users recovered most of the assets owed to them in 2024.