New York Attorney General Letitia James has finalized a settlement worth $2 billion with the bankrupt cryptocurrency firms Genesis Global Capital, LLC, Genesis Asia Pacific PTE, LTD., and Genesis Global Holdco, LLC (collectively known as Genesis).
This settlement aims to maximize recoveries for investors who experienced financial losses. It includes the creation of a victims' fund to compensate defrauded investors, among whom are at least 29,000 New Yorkers who invested over $1.1 billion through the Gemini Earn program. Additionally, the settlement prohibits Genesis from conducting business in New York.
Settlement Reached in Genesis Bankruptcy Case
The settlement required approval from a bankruptcy court due to Genesis' bankruptcy status. It marks the largest settlement against a cryptocurrency company in New York State history. Attorney General James emphasized the importance of this settlement in providing some level of justice to the victims of Genesis' activities. The settlement continues James' efforts to enhance oversight and regulation within the cryptocurrency sector, having secured over $2.5 billion from various cryptocurrency platforms to date.
The Attorney General's office had previously filed a lawsuit in October 2023, accusing Genesis of hiding more than $1.1 billion in losses from investors. This lawsuit was expanded in February to include additional allegations of fraud involving Genesis and related entities. Under the terms of the settlement, Genesis does not admit to any wrongdoing, and the lawsuit will continue against other defendants, including Digital Currency Group, Inc. and its executives.
New York Attorney General James Secures Settlement Worth $2 Billion From Crypto Firm Genesis Global Capital For Defrauded Victims - Genesis Banned From Operating In New York https://t.co/J8e6TX7VXK
— Mondo Visione (@ExchangeNews) May 20, 2024
Victims' Fund Set Up to Compensate Creditors
The newly established Victims' Fund will distribute the remaining assets from Genesis' estate to compensate creditors. If creditors are not fully reimbursed based on current digital asset values, the fund may receive up to $2 billion from Genesis' assets to cover losses.
Attorney General James encourages New Yorkers affected by deceptive practices in virtual asset markets to report these issues to her office and urges industry workers who have witnessed misconduct to filewhistleblower complaints, which can be done anonymously.
This article was written by Tareq Sikder at www.financemagnates.com.
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