New York Attorney General Reaches $2 Billion Settlement With Genesis Global

On Monday, New York Attorney General Letitia James announced that her office has reached a $2 billion settlement with bankrupt cryptocurrency firm Genesis Global.

This settlement responds to allegations that Genesis defrauded investors, including tens of thousands of New Yorkers.

$2 billion settlement

In a post on social media platform X, AG James revealed that this is the largest settlement against a crypto company in New York history. It aims to compensate investors allegedly misled and defrauded by Genesis.

My office secured $2 billion from the crypto platform @GenesisTrading for lied and deceived investors. This is the largest settlement against a crypto company in New York history.

That money will be returned to defrauded investors, and Genesis is also banned from operating in New York. https://t.co/tfQf1wwKu6

— NY AG James (@NewYorkStateAG) May 20, 2024

According to a press release from the Attorney General’s Office, the settlement includes the creation of a Victims Fund designed to help investors defrauded by Genesis. The terms of the settlement also prohibit Genesis from doing business in New York State.

“When investors suffer losses due to fraud and manipulation, they deserve to be cured,” AG James said. “This landmark settlement is an important step in ensuring that the victims who invested in Genesis get some semblance of justice. Once again, we see the real-world consequences and damaging losses that can happen due to a lack of oversight and regulation within the cryptocurrency industry,” he added.

The Victims Fund will benefit the 29,000 New Yorkers who invested more than $1.1 billion through the Gemini Earn investment program. It will be funded through distributions of Genesis’ remaining real estate assets after the company’s creditors receive their initial bankruptcy payments.

If the creditors are not fully compensated based on the current values ​​of the digital assets, the fund will receive up to $2 billion of Genesis’ remaining assets. This money will then be distributed to compensate creditors for their actual losses until the fund is exhausted.

Billion dollar fraud lawsuit

The settlement continues Attorney General James’ efforts to increase oversight and regulation in the cryptocurrency industry. In October 2023, James sued Gemini, GenesisTrading and DCGco, accusing them of defrauding 230,000 investors out of more than $1 billion.

James stated in an October 2023 X post that he was suing crypto companies as an example of the dangers posed by an unregulated crypto industry. He claimed these companies repeatedly assured investors their money was safe while knowing their finances were shaky, causing New Yorkers and everyday Americans to lose millions, including their savings.

The action followed Genesis’ Chapter 11 bankruptcy filing in 2023, which resulted in a freeze on customer withdrawals. Genesis recently received court approval last week to return $3 billion to its customers.

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