New York Regulator Investigating Crypto Exchange Gemini Over FDIC Claims: Report
The New York Department of Financial Services (NYDFS) 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 Earn product were safe thanks to being backed by the Federal Deposit Insurance Corporation (FDIC). 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 amidst the fallout from the collapse of fellow exchange FTX.
Around $900 million is estimated to be frozen on the platform as a result. Gemini itself blamed the halt on a similar freeze at the now bankrupt crypto lender Genesis, a unit of the blockchain conglomerate Digital Currency Group (which also owns CoinDesk), on which the exchange had invested its Earn customers’ funds.
Neither Gemini, FDIC or NYDFS responded to CoinDesk’s request for comment at press time.
Read more: Gemini’s Bitcoin Inflows From Other Exchanges Dropped to Roughly Six-Year Low, CryptoQuant Data Shows
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