Despite reporting to the contrary, Gemini's banking relationship remains intact with JPMorgan.— Gemini (@Gemini) March 8, 2023
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The news comes after Axios reported that the New York State Department of Financial Services (NYDFS) had launched an investigation into Gemini after receiving complaints about the security of customer assets.
The New York-based exchange repeatedly assured that the funds of users of its Earn product are insured by the FDIC. However, this appears to be untrue and the claims are contrary to US federal law.
In January, the US Securities and Exchange Commission charged Gemini and cryptocurrency lending platform Genesis Global Capital with selling unregistered securities in the Earn program. According to the indictment, the Earn landing product offered investors income of up to 8% per year on deposits made.
However, the exchange suspended payments from the program in mid-November 2022 coinciding with the financial problems of the program’s lead partner, Genesis Trading's OTC platform.
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