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Bitcoin price soared today to a level that made everyone believe it could exceed $65,000 by the daily close. But the price turned back from $64,000 and is currently at $59,940 as this article is being prepared. Rapid price increases need breaks, and if you examine past monthly candles, you will likely see long upper wicks on large rising candles, probably forming one of these wicks in a few hours. Turning to the current developments, a settlement has been reached on the Gemini front.
Significant Cryptocurrency Developments
The New York Department of Financial Services announced that a conclusion has been reached in the process concerning Gemini’s stake-to-earn platform, Gemini Earn. Accordingly, the crypto firm founded by the Winklevoss twins will pay a $37 million fine and will return over $1 billion owed to Earn customers.
Recalling the incident, we saw the collapse of the crypto lending companies’ narrative in the last bear market. Investors known as crypto degens, such as high-risk taker Zhu Su, were revealed to have defaulted on their loans. These companies, which used loans for high-risk transactions without providing the necessary collateral, also put the lending companies in a difficult position. The largest crypto lender, Genesis, thus began to experience a cash crisis that would lead to its bankruptcy.
But what does the Gemini exchange and its Earn services have to do with this? Gemini was also offering its customers an Earn service to stake and earn interest income, and it was lending this money to Genesis. Customers, thinking that these cryptocurrencies were being used for activities like market making, were unaware that they were actually being lent to people like Zhu Su and SBF.
In Wednesday’s approval decision, the DFS claims that Gemini mismanaged the program, failed to conduct adequate due diligence on Genesis, and made misleading statements to customers, preventing them from avoiding losses.
