New York AG Settles with Genesis for $2B Over Fraud

New York AG settles with Genesis for $2B to compensate victims defrauded through the Gemini Earn program.

The Attorney General of the State of New York, Letitia James, declared that a $2 billion settlement had been reached with the cryptocurrency firm Genesis to compensate investors who had been defrauded.

The New York Attorney General stated in a notice dated May 20 that the $2 billion settlement between Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco and the authorities had been approved by a bankruptcy court. The settlement prohibits Genesis’ operations in New York and mandates the return of the invested funds to Genesis investors.

James asserted that investors who contributed over $1.1 billion to the Genesis platform via the Gemini Earn program had been “cheated and lied to.” When Cointelegraph reached out to a Genesis representative, they cited the organization’s May 17 statement.

Derar Islam, the interim CEO of Genesis, stated, “Our objective throughout this process has been to maximize value for all creditors, and we are delighted that the court has approved both our [bankruptcy plan] and the NYAG settlement agreement.”

In October 2023, the New York Attorney General initiated legal proceedings against Genesis. Subsequently, the lawsuit was amended to encompass the Digital Currency Group, its former CEO, Soichiro Moro, and its CEO, Barry Silbert.

James stated that the lawsuit would proceed against the remaining defendants and the Gemini Trust Company and that the settlement terms only applied to Genesis.

The Genesis settlement represented the most recent development in a sequence of legal proceedings initiated by the New York Attorney General against cryptocurrency companies that maintain activities within the state.

James’ office sued KuCoin in 2023 for operating as an unregistered exchange and alleged that Ether ETH tickers down $3,141 was a security. The firm and James reached a $22 million settlement.

Additionally, the New York attorney general sued former Celsius CEO Alex Mashinsky on charges that he concealed the “dire financial condition” of the platform. Mashinsky is presently confronted with criminal charges of securities fraud, wire fraud, and conspiracy to perpetrate fraud in the Southern District of New York. His trial is scheduled for January 2025.