Gemini reportedly claimed repeatedly that its the assets of customers using its Earn product were safe thanks to being backed by the Federal Deposit Insurance Corp.
The New York Department of Financial Services is investigating crypto exchange Gemini over claims it made related to the safety of its customers’ assets, according to an Axios report on Monday.
Last year, Gemini reportedly claimed repeatedly that its the assets of customers using its interesting-bearing Earn product were safe because they were backed by the Federal Deposit Insurance Corp. It is against the law for a financial firm to imply that an uninsured product is FDIC-insured.
Gemini halted withdrawals from its Earn product in November last year amid the fallout from the collapse of fellow exchange FTX.
Around $900 million is estimated to be frozen on the platform as a result. Gemini blamed the halt on a similar freeze at the now-bankrupt crypto lender Genesis, where Gemini has invested its customers’ funds. Genesis and CoinDesk are both owned by crypto conglomerate Digital Currency Group.
