Risk register · entry
Q-F · FraudGenesis / 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.
Why this quadrant
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
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