Letitia James, the attorney general of New York, made an announcement stating that her office has successfully reached a $2 billion settlement with cryptocurrency firm Genesis in order to compensate investors who were defrauded.
According to a notice released on May 20, the New York attorney general revealed that a bankruptcy court has approved the settlement of $2 billion between authorities and Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco. As per the terms of the settlement, the funds will be returned to the investors of Genesis, and the company will be prohibited from operating in New York.
James accused Genesis of deceiving and defrauding investors who had sent over $1.1 billion to the platform through the Gemini Earn program. Cointelegraph reached out to a Genesis spokesperson who referred to the company’s statement made on May 17.
Genesis interim CEO Derar Islim expressed satisfaction with the court’s approval of both their bankruptcy plan and the settlement agreement with the New York attorney general. Islim stated, “Our primary objective throughout this process has been to maximize value for all creditors, and we are pleased that the court has approved our plan and the settlement agreement with the NYAG.”
The lawsuit against Genesis was initially filed by the New York attorney general’s office in October 2023, and it was later expanded to include the Digital Currency Group, its CEO Barry Silbert, and former Genesis CEO Soichiro Moro. Letitia James clarified that the settlement terms only apply to Genesis, and the lawsuit will continue against the remaining defendants and the Gemini Trust Company.
This settlement with Genesis is the most recent in a series of lawsuits initiated by the New York attorney general’s office against cryptocurrency firms operating in the state. In 2023, James’ office filed a lawsuit against KuCoin for operating as an unregistered exchange and claimed that Ether (ETH) was a security. The case was eventually settled for $22 million.
The New York attorney general’s office also filed a lawsuit against former Celsius CEO Alex Mashinsky, accusing him of concealing the platform’s dire financial state. Mashinsky currently faces criminal charges in the Southern District of New York relating to securities fraud, wire fraud, and conspiracy to commit fraud. His trial is expected to begin in January 2025.
Source: New York Attorney General Letitia James