Gemini reports wider-than-expected Q2 loss on credit card fraud provisions

Gemini Technologies Inc. reported a wider-than-expected net loss for the second quarter as rising credit card fraud provisions weighed on profitability.

The New York-based cryptocurrency exchange said on Wednesday its Q2 loss exceeded analyst estimates, primarily due to elevated fraud-related costs tied to its credit card operations. The company did not disclose the exact loss figure but noted that provisions for fraud had expanded significantly compared with the prior period.

Gemini’s shares fell 6% in after-hours trading following the announcement, extending declines from the regular session. Analysts had anticipated a loss but had not expected the shortfall to widen as sharply as reported.

The credit card fraud provisions reflect increased instances of unauthorized transactions and chargebacks, a trend that has pressured margins across the fintech sector. Gemini did not provide a detailed breakdown of the fraud-related expenses but acknowledged that the issue had materially impacted its financial performance.

The company, which operates both a cryptocurrency exchange and a crypto-linked credit card, has faced growing regulatory scrutiny in recent months. Earlier this year, U.S. financial regulators heightened oversight of crypto-linked financial products, including credit cards tied to digital assets.

Gemini’s management stated that it is implementing additional fraud detection measures to mitigate future risks. However, the near-term impact on profitability remains a concern for investors, particularly as the company navigates a challenging macroeconomic environment and evolving regulatory landscape.