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Crypto Exchange Gemini Emphasized FDIC Insurance in Communications With Earn Customers: Report

Crypto Exchange Gemini Emphasized FDIC Insurance in Communications With Earn Customers: Report

Crypto Exchange Gemini Emphasized FDIC Insurance in Communications With Earn Customers: Report

Gemini reportedly repeatedly implied that the assets of customers using its Earn product were safe thanks to being backed by the Federal Deposit Insurance Corp.

Gemini reportedly repeatedly implied that the assets of customers using its Earn product were safe thanks to being backed by the Federal Deposit Insurance Corp.

Gemini reportedly repeatedly implied that the assets of customers using its Earn product were safe thanks to being backed by the Federal Deposit Insurance Corp.

AccessTimeIconJan 30, 2023, 12:56 PM
Updated Jan 30, 2023, 6:29 PM
Gemini founders Cameron and Tyler Winklevoss (Shutterstock)
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CORRECTION (Jan. 30, 18:26 UTC): An earlier version of this article incorrectly drew the conclusion that Gemini is being investigated by the New York Department of Financial Services specifically for misrepresenting that its EARN accounts were backed by the FDIC.

Cryptocurrency exchange Gemini reportedly implied to customers that their assets in its interesting-bearing Earn product were safe because they were backed by the Federal Deposit Insurance Corp (FDIC), Axios reported on Monday.

According to the report, Gemini's discussions with customers referred to the FDIC, but appeared to be in reference to the firm's deposits at other banks, as opposed to its own products, a distinction which customers did not seem to understand.

It is against the law for a financial firm to imply that an uninsured product is FDIC-insured.

The New York Department of Financial Services (NYDFS) is investigating Gemini, according to the Axios report.

Gemini had not responded to CoinDesk's request for an official comment on the matter at press time.

The exchange 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.

The FDIC and the NYDFS both declined to comment.



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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jamie Crawley is a CoinDesk news reporter based in London.


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