Illustration: Annelise Capossela/Axios
As the cryptocurrency market imploded last year, Gemini Earn customers repeatedly asked the company if their assets were safe. Some of Gemini’s responses, reviewed by Axios, emphasized connections to the Federal Deposit Insurance Corporation.
Why it matters: Customers say that led them to believe their accounts were insured by the government agency. They weren’t.
The big picture: Federal law prohibits anyone from "implying that an uninsured product is FDIC–insured or from knowingly misrepresenting the extent and manner of deposit insurance."
For the record: In response to an Axios inquiry, Gemini declined to comment.
The backstory: Crypto was supposed to be an alternative to the traditional financial system — but leaning on one of the iconic regulatory bedrocks of banking helped Gemini gain customer trust.
Gemini used similar language in a July 24, 2022, email to Earn investor Manohar Venkataraman, an IT consultant in New York. Venkataraman had asked about the safety of his GUSD. "I've seen references to FDIC insured," he wrote.
Another customer service email in response to a 24-year-old Gemini Earn investor who was worried about his GUSD reads: "GUSD reserves are held by Gemini in accounts at U.S. FDIC-insured bank accounts and money market funds holding short-term treasury bonds."
Ian McCray, a truck driver in Syracuse with about $17,000 of savings in Gemini Earn, said he thought Gemini Earn was FDIC-insured when he started investing in November 2021. He saw the term all over Gemini's website, he said, and "it made it seem like it was safe, literally."
The intrigue: Not all customers we heard from believed their funds were FDIC-backed. Some simply had faith in Gemini's owners, Cameron and Tyler Winklevoss, the twins made famous by the film "The Social Network."
What they're saying: Dennis Kelleher, the president of Better Markets, a nonprofit that advocates for tighter regulation, says he believes Gemini's intention was to mislead. "Everybody knows the value in terms of investor comfort and confidence in something that is FDIC insured."
Zoom out: "The FDIC fundamentally is about maintaining public confidence in the banking system and the financial system," FDIC chair Martin Gruenberg said at a Brookings event in October, where he explained that the agency had seen several instances of crypto companies giving customers the impression they were protected by the government safety net.
Be smart: Current and former FDIC officials say the inclusion of the word “knowingly” in a provision of the law that makes it illegal to misrepresent the existence of deposit insurance makes enforcement difficult.
Worth noting: It’s also unclear how aggressive the FDIC has been in using its powers to crack down on those that imply that they’re covered by this gold standard of consumer protections.
The bottom line: Earn investors are devastated. A lot of these customers are looking for someone to blame in all this — the marketing, the belief in crypto more broadly, the regulators. Many are also looking inward and saying they should've known better.
Were you an Earn customer or a Gemini employee? We'd like to hear your story. Email: [email protected] or [email protected] We're also on Signal.

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