Genesis / Gemini Earn

A 'low-risk' yield product concealing a solvency hole.

The fifth quadrant, where the thing was never real. The tell is that the story is too clean.

Room: Q-F Fraud
Year: 2023
Impact: $1.1B
Sector: Crypto lending
Region: N. America
Category: Economic

Why this room

Earn's payoff structure was marketed as simple and steady (fixed APY, no visible downside), which is exactly what let a genuine tail event, Three Arrows Capital's default, get absorbed off-book via a sham promissory note rather than disclosed; the shift from ordinary credit/liquidity risk into the Fraud quadrant happened at the moment concealment replaced disclosure, not at the moment the underlying loans went bad.

The record

Gemini Earn launched February 2021, advertised up to ~8% APYcertain
~232,000 Gemini Earn users had active loans when Genesis halted withdrawals; broader program had ~340,000 userslikely
~$900 million to $1.1 billion in Earn assets frozen (figures vary by source and by date measured)likely
Three Arrows Capital defaulted on ~$1.2 billion owed to Genesis, around June 13, 2022likely
DCG-Genesis $1.1 billion, 10-year promissory note at 1% interest signed June 30, 2022certain
Genesis halted Gemini Earn withdrawals November 16, 2022certain
Genesis filed Chapter 11 bankruptcy January 19, 2023certain
SEC charged Genesis and Gemini with unregistered securities offering, January 2023; Genesis paid $21 million SEC penaltycertain
Gemini-NYDFS settlement, February 28, 2024: $37 million fine, $40 million bankruptcy contribution, commitment to return ~100% (~$1.1 billion) to Earn customerscertain
NYAG (Letitia James) sued Gemini, Genesis, DCG, Michael Moro, and Barry Silbert for fraud, October 2023certain
SEC dismissed its lawsuit against Gemini in January 2026 after full Earn customer restitutioncertain
A bankruptcy judge approved a roughly $2 billion NYAG-Genesis settlement (exact date/year uncertain, reported as 2025)uncertain

Sources

The book

This entry is one of 111 in the register. The full story, and what it cost the people who lived it, is in Risky Business by Claudia Zeisberger, David Munro and Joanna Reijgersberg-Siew.

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