- Attorney General Letitia James has announced a $2B settlement with bankrupt Genesis.
- The settlement seeks recoveries for 29K New Yorkers who lost over $1.1B.
- Part of the settlement terms is a ban on Genesis from operating within New York
In a landmark victory for defrauded investors, New York Attorney General Letitia James has announced a $2 billion settlement with the bankrupt cryptocurrency firm Genesis Global Capital and its subsidiaries.
This settlement is the largest of its kind against a crypto company in New York State history. It aims to maximize recoveries for investors, including at least 29,000 New Yorkers who lost over $1.1 billion through the Gemini Earn investment program.
Notably, the agreement is pending approval from a bankruptcy court. Following the appropriate approvals, a victims’ fund will be created to compensate the defrauded investors.
The Victims’ Fund will receive distributions from Genesis’ remaining assets after initial bankruptcy distributions to creditors. The fund will distribute up to $2 billion to cover their actual losses if the creditors are not fully compensated based on current digital asset values.
Attorney General James stated, “When investors suffer losses because of fraud and manipulation, they deserve to be made whole.”
This settlement follows the lawsuit filed by Attorney General James in October 2023. It accused Genesis and other defendants of hiding significant losses from investors. In February, it was expanded to include additional allegations that they defrauded individuals and institutions of another $2 billion.
The new settlement announcement also noted that the lawsuit will continue against the remaining defendants, including Genesis’ former business partner, Gemini Trust Company, LLC. As part of the settlement terms, Genesis is banned from operating within New York.
Attorney General James has been a leading figure in efforts to regulate the cryptocurrency industry and protect investors. Her office has reportedly secured over $2.5 billion from predatory cryptocurrency platforms to date.
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