Letitia James, the Attorney General of New York State, made an announcement stating that her office has reached a settlement of $2 billion with cryptocurrency firm Genesis to compensate investors who were defrauded.
According to a notice released on May 20, the New York AG stated that a bankruptcy court has approved the settlement 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 Genesis investors, and the company will be prohibited from operating in New York.
James accused Genesis of deceiving and cheating investors who had sent over $1.1 billion to the platform through the Gemini Earn program. When contacted by Cointelegraph, a Genesis spokesperson referred to the company’s statement from May 17.
Derar Islim, the interim CEO of Genesis, expressed satisfaction with the court’s approval of both their bankruptcy plan and the settlement agreement with the New York AG. He emphasized that their primary goal throughout the process has been to maximize value for all creditors.
The New York Attorney General’s office initially filed a lawsuit against Genesis in October 2023, which was later expanded to include the Digital Currency Group, its CEO Barry Silbert, and former Genesis CEO Soichiro Moro. James clarified that the settlement terms only applied to Genesis, and the lawsuit would continue against the remaining defendants and the Gemini Trust Company.
This Genesis settlement is the latest in a series of lawsuits brought by the New York AG against cryptocurrency firms operating in the state. In 2023, James’ office filed a lawsuit against KuCoin for operating as an unregistered exchange and settled with the firm for $22 million. At that time, they also claimed that Ether (ETH) was a security.
The New York AG also filed a lawsuit against former Celsius CEO Alex Mashinsky for allegedly concealing the platform’s dire financial condition. Mashinsky is currently facing criminal charges related to securities fraud, wire fraud, and conspiracy to commit fraud in the Southern District of New York. His trial is expected to begin in January 2025.
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