NYAG says Genesis settlement to pay back creditors up to $2B

NYAG announced details about its settlement with bankrupt lender Genesis on Monday

May 20, 2024 11:59 am

New York State Attorney General Letitia James | lev radin/Shutterstock modified by Blockworks

New York Attorney General Letitia James said Genesis and the attorney general’s office will create a “Victims Fund” for creditors of Genesis.

The fund will receive “up to $2 billion” from the remaining assets of Genesis.

“If those creditors are not made whole based on today’s digital asset values, the Victims’ Fund will receive up to $2 billion from Genesis’ remaining assets,” the press release said.

The settlement was approved by a bankruptcy judge late Friday after being challenged by parent company Digital Currency Group earlier this year.

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Genesis and the NYAG originally announced the settlement back in February.

As part of the settlement, Genesis agreed to cease current business offerings in New York and is prohibited from future business in the state.

According to a press release, the settlement is the “largest against a cryptocurrency company in state history.”

“This historic settlement is a major step toward ensuring the victims who invested in Genesis have a semblance of justice. Once again, we see the real-world consequences and detrimental losses that can happen because of a lack of oversight and regulation within the cryptocurrency industry. New York investors deserve the peace of mind that comes from a properly regulated marketplace, and that is something my office will always act to achieve,” James said in a press release.

The NYAG sued DCG, Gemini and Genesis in October of last year, alleging that Gemini and Genesis coordinated on two “fraudulent schemes” with the Gemini Earn product.

DCG allegedly “coordinated” with the two companies, per the lawsuit.

The settlement announcement puts Genesis a step closer to finalizing its bankruptcy proceedings after a judge approved its liquidation plan at the same time as the settlement on Friday.

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