Genesis Reaches $2 Billion Settlement With New York AG’s Office

The
New
York
State
Attorney
General’s
office
has
secured
a
$2
billion
settlement
with
Genesis
Global
Capital,
the
bankrupt
cryptocurrency
lending
platform.
The
settlement,
approved
by
a
federal
bankruptcy
judge,
will
establish
a
victims’
fund
to
compensate
thousands
of
New
Yorkers
and
other
investors
who
lost
money
through
Genesis’
platform.

Genesis
Ordered
To
Pay
Up
To
$2
Billion
To
Victims 

New
York
Attorney
General
Letitia
James


announced

the
agreement
on
Monday,
describing
it
as
the
largest
settlement
ever
obtained
against
a
cryptocurrency
company
by
the
state. 

The
settlement
resolves


claims

that
Genesis
and
its
affiliates
concealed
over
$1.1
billion
in
losses
from
investors
participating
in
the
company’s
“Gemini
Earn”
program.
Attorney
General
James
states:

When
investors
suffer
losses
because
of
fraud
and
manipulation,
they
deserve
to
be
made
whole.
This
historic
settlement
is
a
major
step
toward
ensuring
the
victims
who
invested
in
Genesis
have
a
semblance
of
justice.

The
settlement
comes
after
the
Attorney
General’s
office
filed
a
lawsuit
in
October
2023
alleging
that
Genesis
and
other
defendants
defrauded
hundreds
of
thousands
of
investors
nationwide.
That
lawsuit
was
later
expanded
in
February
to
target
Genesis’
parent
company,
Digital
Currency
Group
(DCG),
its
CEO,
Barry
Silbert,
and
Genesis’
former
CEO,
Soichiro
Moro.

Under
the
terms
of
the
agreement,
the
crypto
lender
will
not
admit
to
any
wrongdoing.
Still,
the
lawsuit
against
the
remaining
defendants
and
Genesis’
former
business
partner,
Gemini
Trust
Company,
will
continue.

The
$2
billion
settlement
will
establish
a
“Victims’
Fund”
to
distribute
payments
to
the
firm’s
creditors,
including
at
least
29,000
New
Yorkers
who
contributed
more
than
$1.1
billion
to
the
company’s
Gemini
Earn
program.

If
the
assets
remaining
in
Genesis’


bankruptcy
estate

are
insufficient
to
fully
compensate
those
creditors,
the
settlement
requires
Genesis
to
contribute
up
to
an
additional
$2
billion
to
the
fund.

Crypto
Oversight
Pledge
By
New
York
AG 

Genesis’s
collapse
was
closely
linked
to
the
high-profile
downfall
of
crypto
exchange
FTX
and
its
sister
trading
firm
Alameda
Research
in
late
2022.
Prior
to
its
bankruptcy,
the
firm
had
reportedly
lent
millions
of
dollars
in
unsecured
loans
to
Alameda
and
$2.4
billion
to
the
now-defunct
crypto
hedge
fund
Three
Arrows
Capital.

As
Bitcoinist


reported,
Friday’s
bankruptcy
court
ruling
approving
Genesis’
repayment
plan
also
represents
a
significant
step
forward
in
the
ongoing
effort
to
recover
funds
for
the
crypto
industry’s
recent
turmoil
victims. 

Attorney
General
James
has
pledged
to
continue
her
office’s
work
to
increase
oversight
and
regulation
in
the


cryptocurrency
space,
having
already
secured
over
$2.5
billion
in
settlements
from
other
predatory
platforms.
James
concluded
by
stating: 

Once
again,
we
see
the
real-world
consequences
and
detrimental
losses
that
can
happen
because
of
a
lack
of
oversight
and
regulation
within
the
cryptocurrency
industry.
New
York
investors
deserve
the
peace
of
mind
that
comes
from
a
properly
regulated
marketplace,
and
that
is
something
my
office
will
always
act
to
achieve.”

Featured
image
from
Shutterstock,
chart
from
TradingView.com