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

New York Attorney General Letitia James announced on Monday that her office has obtained a $2 billion settlement with bankrupt cryptocurrency company Genesis Global.

The agreement comes in response 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 cryptocurrency company in New York history. It aims to compensate investors who were allegedly misled and defrauded by Genesis.

My office received $2 billion from the cryptocurrency platform @Genesis Trading To lie and deceive investors. This is the largest settlement against a cryptocurrency company in New York history.

This money would go back to the defrauded investors, and Genesis would be banned from operating in New York. https://t.co/tfQf1wwKu6

– New York AG James (@NewYorkStateAG) May 20, 2024

According to a press release issued by the Attorney General’s Office, the settlement was reached Includes Establishment of a Victims Fund designed to help investors misled 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 compensation,” said AG James. “This historic settlement is a major step towards ensuring that victims who invested in Genesis receive a semblance of justice. Once again, we see the real-world consequences and harmful losses that can occur due to a lack of oversight and regulation within the cryptocurrency industry,” she added.

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

If 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. These funds 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 filed a lawsuit against Gemini, GenesisTrading, and DCGco, accusing them of defrauding 230,000 investors out of more than $1 billion.

Mosques advertiser In an October 2023 X post, she said she was suing cryptocurrency companies as an example of the risks posed by the unregulated cryptocurrency industry. She alleged that these companies repeatedly assured investors that their money was safe while knowing that their finances were unstable, resulting in New Yorkers and everyday Americans losing millions, including their savings.

The action came on the heels of Genesis filing for Chapter 11 bankruptcy in 2023, which led to a freeze on customer withdrawals. Genesis recently received court approval last week to return $3 billion to its customers.