Genesis settles for $2 billion in New York AG crypto case

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New York Attorney General Letitia James has reached a $2 billion settlement with crypto lender Genesis to repay their investors, as reported by CNBC.

Genesis, a central figure within the Digital Currency Group (DCG), succumbed to the industry-wide impact following FTX’s collapse, leading to a Chapter 11 bankruptcy filing in January 2023.

“This historic settlement is a major step toward ensuring the victims who invested in Genesis have a semblance of justice,” said Attorney General James. The settlement is unprecedented in New York against a crypto firm.

James’s lawsuit, which began in October against DCG, Genesis, and Gemini Trust, expanded by February to include accusations of defrauding investors out of an additional $2 billion. Despite DCG’s legal opposition, the bankruptcy court-sanctioned Genesis’s repayment plan, incorporating the settlement.

Genesis has not acknowledged the allegations in the lawsuit, and the agreement notably does not involve Gemini. The settlement prohibits Genesis from operating in New York and creates a Victims’ Fund for over 29,000 New Yorkers who invested more than $1.1 billion via the Gemini Earn product.

The SEC’s lawsuit against Genesis and Gemini for unregistered securities offerings has also been resolved with a separate court-approved settlement. The restructuring strategy includes a customer repayment plan for those with tokens frozen since November 2022.

The Victims’ Fund will acquire assets left in Genesis’s estate after creditors receive initial bankruptcy distributions, potentially amounting to $2 billion based on the current value of digital assets.

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