New York Attorney General concludes $2b Genesis settlement

The
New
York
Attorney
General
Letitia
James
has
reached
a
$2
billion
settlement
with
Digital
Currency
Group
subsidiary
Genesis. 

According
to
a

press
release
from
the
Attorney
General’s
office,
New
York’s
settlement
with
the
crypto
lender
aims
to
reimburse
creditors
and
demonstrates
the
“real-world
consequences”
caused
by
an
apparent
lack
of
oversight
on
digital
assets
and
the
crypto
landscape. 

Backed
by
Barry
Silbert’s
Digital
Currency
Group
(DCG),
Genesis
was
one
of
the
largest
crypto
lenders
and
partnered
with
Gemini
Exchange
for
a
yield-bearing
product
called
Gemini
Earn. 

In
2022,
Genesis
faced
bankruptcy
following
the
crash
of
Do
Kwon’s
Terraform
blockchain
ecosystem
and
the
collapse
of
Sam
Bankman-Fried’s
FTX
empire. This
led
to
a
public
dispute
with
former
business
partner
Gemini,
which

accused
Genesis
of
defrauding
hundreds
of
thousands
of
Gemini
Investors. 

After
the
conflict,
AG
James

sued
DCG,
Genesis,
and
Gemini
for
$1
billion
last
October,
alleging
that
the
three
parties
deceived
investors
and
operated
without
compliant
disclosers
for
the
Earn
program. 

Settlement
terms

As
crypto.news

reported,
James
and
her
office
sought
$2
billion
in
a
follow-up
lawsuit
with
similar
claims
of
violations.
The
settlement
between
New
York
and
Genesis
did
not
include
Gemini
and
was
previously
approved
by
the
bankruptcy
court
overseeing
the
firm’s
Chapter
11
restructuring. 

Furthermore,
the
agreement
mandated
a
relief
fund
for
nearly
30,000
residents
believed
to
have
deposited
over
$1
billion
in
the
platform. 
The
crypto
lender
is
also
banned
from
conducting
business
within
New
York’s
borders. 

According
to
the
terms,
Genesis
neither
denied
or
admitted
claims
made
by
AG
James
and
the
State
of
New
York
regarding
fraud
and
investor
manipulation.
The
company
has
also
settled
with
U.S.
Securities
and
Exchange
alleging
civil

misconduct
with
Gemini
Earn.