The New York Department of Financial Services (NYDFS) has launched an investigation into Gemini.
The investigation revolves around claims that Gemini has falsely advertised its services as FDIC-insured. The FDIC, or the Federal Deposit Insurance Corporation, is a US government agency that provides insurance for depositors in case of a bank failure.
Gemini has been advertising that the FDIC protects its clients’ funds, but this is not true. The FDIC only provides insurance for traditional bank depositors and does not cover cryptocurrency exchanges. This false advertising has led to confusion among customers who believe their funds are insured like their traditional bank deposits.
The NYDFS has stated that the investigation focuses on ensuring that Gemini provides accurate information to its customers and operates in a manner consistent with New York state law.
The regulator will review Gemini’s an advertising and marketing materials to determine whether they are misleading or false. The NYDFS will also examine Gemini’s internal policies and procedures to ensure that they are consistent with state law and do not pose any risks to consumers.
Gemini has stated that it is cooperating fully with the NYDFS and is confident that it will be able to resolve the investigation quickly.