New York State's financial regulator said Gemini Trust Co. LLC, the crypto firm founded by twins Cameron and Tyler Winkelvoss, has agreed to return at least $1.1B to customers of its Gemini Earn program through the Genesis Global Capital bankruptcy proceedings.

As part of the commitment, Gemini will contribute $40M to the Genesis Global Capital bankruptcy for the benefit of Earn customers in coordination with the bankruptcy court, said New York State Department of Financial Services ("DFS") Superintendent Adrienne A. Harris.

Gemini will also pay a $37M fine to DFS for failures that threatened the safety and soundness of the company, the regulator said.

Under the agreement, DFS will have the right to bring further action against Gemini if the company doesn't live up to its obligation to return at least $1.1B to Earn customers after the GGC bankruptcy is resolved.

The DFS said that Gemini failed to conduct due diligence on GGS, an unregulated third party, when setting up the Earn program. Earn, launched on Feb. 1, 2021, allowed Gemini customers to loan virtual currency to GGC, which isn't licensed by the DFS. GGC then loaned those same assets to its own counterparties.

"Despite Gemini’s public statements to the contrary, Gemini did not fully vet or sufficiently monitor GGC throughout the life of Earn and, in November 2022, GGC defaulted on approximately $1B worth of loans made by Earn customers," NYDFS said.