Letitia James, the attorney general of New York State, 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 20th by the New York attorney general’s office, a bankruptcy court has approved the settlement of $2 billion between authorities and Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco. As part of the settlement, the funds will be returned to the investors affected by 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 spokesperson from Genesis, who referred to the company’s statement issued on May 17th.
Derar Islim, the interim CEO of Genesis, stated, “Throughout this process, our main objective has been to maximize value for all creditors, and we are pleased that the court has approved both our bankruptcy plan and the settlement agreement with the New York attorney general’s office.”
Source:
Letitia James, New York Attorney General
The lawsuit against Genesis was originally filed by the New York attorney general’s office in October 2023, and 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 apply to Genesis, and the lawsuit will proceed against the remaining defendants and the Gemini Trust Company.
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The settlement with Genesis is the most recent in a series of lawsuits filed by the New York attorney general’s office against cryptocurrency firms operating within the state. In 2023, James’ office filed a lawsuit against KuCoin for operating as an unregistered exchange, and at the time, also claimed that Ether (ETH) was a security. The case was eventually settled for $22 million.
Additionally, the New York attorney general’s office filed a lawsuit against former Celsius CEO Alex Mashinsky for allegedly concealing the dire financial state of the platform. Mashinsky currently faces criminal charges in the Southern District of New York for securities fraud, wire fraud, and conspiracy to commit fraud, with a trial expected to take place in January 2025.
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