Genesis agrees to settle case brought by New York attorney general

The bankrupt crypto lender’s settlement proposal comes after it agreed to pay a possible $21 million as part of an agreement with the SEC last week


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


Genesis has settled a suit that New York’s attorney general launched against the crypto lender last year, marking the crypto firm’s second such agreement in the past week.

New York Attorney General Letitia James in October filed a lawsuit against Genesis and Gemini, alleging the firms had conspired on two “fraudulent schemes” related to their Gemini Earn product.

Investors lost more than $1 billion in November 2022 when withdrawals from the platform were suspended, according to the complaint.

Read more: New York AG sues DCG, Gemini and Genesis in ‘sweeping lawsuit’

Genesis’ proposed settlement agreement, filed Thursday, is a step toward “eliminating the risks, expenses and uncertainty associated with protracted litigation against NYAG,” the company said in a court motion.

The motion must still be approved by the US bankruptcy court, the document notes.

Genesis’ lending unit filed for Chapter 11 bankruptcy protection in January 2023.  

“The Special Committee has concluded that it would not be in the best interests of the debtors’ estates to continue to incur litigation costs and expenses to defend against the NY Action related to business activities that are not ongoing,” the motion states.

As part of the proposed agreement, Genesis would cease all current and future business activities in New York. 

Gemini said in an October X post that it disagreed with the New York attorney general, including the firm in the complaint. Genesis lied to Gemini about its financial position, the company claimed, adding that Gemini, Earn users, and other creditors were “the victims of a massive fraud.” 

A representative for Genesis could not immediately be reached. 

Genesis parent company Digital Currency Group was also named in the complaint for allegedly coordinating with the companies to perpetuate the scheme. The company noted it was “blindsided” by the filing in a statement at the time and denied wrongdoing.

The Thursday motion by Genesis to settle the suit comes about a week after the company agreed to settle a similar case brought by the SEC

The US regulator filed its suit against Genesis in January 2023, accusing the company of pooling assets from Gemini Earn with funds from other customers. 

Genesis could pay $21 million as part of the agreement, the SEC said last week, though the amount is subject to creditor repayment.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg


In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.


The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally


While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders


Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume


DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit


The Boston Globe reports that lawyer John Deaton is weighing a possible bid


Ethereum’s Dencun upgrade will enable Uniswap v4 to optimize smart contracts for complex functionality