The New York Department of Financial Services (NYDFS) is investigating crypto exchange Gemini over claims it made related to the safety of its customers' assets, according to an Axios report on Monday.
Last year, Gemini reportedly claimed on several occasions that the assets of customers using its proceeds were secure through support from the federal deposit insurance company (FDIC). It is unlawful for a financial practice to suggest that an uninsured product is insured by the FDIC.
Gemini halted withdrawals from its Earn product in November last year amidst the fallout from the collapse of fellow exchange FTX.
It is estimated that approximately $900 million will be frozen on the rig accordingly. Gemini blamed himself for stopping a freeze similar to the genesis now in crypto bankruptcy lender, a unit of the digital money group blockchain conglomerate (which also possesses coindesk), on which the stock exchange invested its client earnings funds.
Neither Gemini, Fdic, nor Nydfs responded to the request for comments from Coindesk at the time of printing.