The New York State Department of Financial Services claims that Gemini, which the twins started following their well-known argument with Mark Zuckerberg over who developed Facebook, neglected to "fully vet or sufficiently monitor" Genesis, Gemini Earn's now-bankrupt lending partner.
The Earn program, which promised users up to 8% income on their cryptocurrency deposits, was canceled in November 2022 when Genesis was unable to pay withdrawals due to the fall of infamous scammer Sam Bankman-Fried's FTX enterprise.
Since then, almost 30,000 residents of New York and over 200,000 other Earn users have lost access to their money.
Gemini "engaged in unsafe and unsound practices that ultimately threatened the financial health of the company," according to the state regulator.
NYSDFS Superintendent Adrienne Harris claimed in a statement that "Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown."
Customers of Earn, who are entitled to the assets they committed to Gemini, have won with today's settlement.
“Collecting hundreds of millions of dollars in fees from Gemini customers that otherwise could have gone to Gemini, substantially weakening Gemini’s financial condition,” was the unregulated affiliate that dubbed Gemini Liquidity during the crisis.
Although it did not provide any details, the regulator added that it "further identified various management and compliance deficiencies."
Gemini also consented to pay $40 million to Genesis' bankruptcy proceedings as part of the settlement, for the benefit of Earn customers.
"If the company does not fulfill its obligation to return at least $1.1 billion to Earn customers after the resolution of the [Genesis] bankruptcy," the NYSDFS stated that it "has the right to bring further action against Gemini."
Gemini announced that the settlement would "result in all Earn users receiving 100% of their digital assets back in kind" during the following 12 months in a long statement that was posted on X.
The business further stated that final documentation is required for the settlement and that it may take up to two months for the bankruptcy court to approve it.
The New York Department of Financial Services (DFS) was credited by Gemini with helping to reach a settlement that gives Earn users a coin-for-coin recovery.
Attorney General Letitia James of New York filed a lawsuit against Genesis and Gemini in October, accusing them of defrauding Earn consumers out of their money and labeling them as "bad actors."
James tripled the purported scope of the lawsuit earlier this month. The complaint was submitted a few weeks after The Post revealed that, on August 9, 2022, well in advance of Genesis's bankruptcy, Gemini had surreptitiously taken $282 million in cryptocurrency from the company.
Subsequently, the twins stated that the change was made to the advantage of the patrons.
The brothers' actions, however, infuriated Earn customers, with one disgruntled investor telling The Post that "there's no good way that Gemini can spin this."
In a different lawsuit, the SEC is suing Gemini and Genesis because the Earn program was an unregistered security.
The collapse of Earn was a significant blow to the Winklevoss twins' hopes of becoming a dominant force in the industry.
Gemini had built its brand on the idea that it was a reliable player in the wild, mostly uncontrolled cryptocurrency market.
Google has been working on the development of the Gemini large language model (LLM) for the past eight months and just recently provided access to its early versions to a small group of companies. This LLM is believed to be giving head-to-head competition to other LLMs like Meta’s Llama 2 and OpenAI’s GPT-4.
The AI model is designed to operate on various formats, be it text, image or video, making the feature one of the most significant algorithms in Google’s history.
In a blog post, Google CEO Sundar Pichai wrote, “This new era of models represents one of the biggest science and engineering efforts we’ve undertaken as a company.”
The new LLM, also known as a multimodal model, is capable of various methods of input, like audio, video, and images. Traditionally, multimodal model creation involves training discrete parts for several modalities and then piecing them together.
“These models can sometimes be good at performing certain tasks, like describing images, but struggle with more conceptual and complex reasoning,” Pichai said. “We designed Gemini to be natively multimodal, pre-trained from the start on different modalities. Then we fine-tuned it with additional multimodal data to further refine its effectiveness.”
Google also unveiled the Cloud TPU v5p, its most potent ASIC chip, in tandem with the launch. This chip was created expressly to meet the enormous processing demands of artificial intelligence. According to the company, the new processor can train LLMs 2.8 times faster than Google's prior TPU v4.
For ChatGPT and Bard, two examples of generative AI chatbots, LLMs are the algorithmic platforms.
The Cloud TPU v5e, which touted 2.3 times the price performance over the previous generation TPU v4, was made generally available by Google earlier last year. The TPU v5p is significantly faster than the v4, but it costs three and a half times as much./ Google’s new Gemini LLM is now available in some of Google’s core products. For example, Google’s Bard chatbot is using a version of Gemini Pro for advanced reasoning, planning, and understanding.
Developers and enterprise customers can use the Gemini API in Vertex AI or Google AI Studio, the company's free web-based development tool, to access Gemini Pro as of December 13. Further improvements to Gemini Ultra, including thorough security and trust assessments, led Google to announce that it will be made available to a limited number of users in early 2024, ahead of developers and business clients.