NY AG Secures $2B Settlement with Genesis for Defrauded Victims
The attorney general of New York, Letitia James, revealed that her office had successfully negotiated a $2 billion settlement with Genesis, a cryptocurrency firm, to compensate the investors who were allegedly defrauded. On May 20, James announced that a bankruptcy court had ratified the agreement between governmental authorities and three entities — Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco. The terms of this settlement mandate that the funds be returned to Genesis investors, and prohibit the company from continuing its operations within the state of New York.
James asserted that Genesis had been engaging in deceitful practices toward their investors, who had channeled more than $1.1 billion into the platform via the Gemini Earn program. When asked for a comment, a representative for Genesis directed reporters to a statement the company made on May 17. In that statement, Genesis interim CEO Derar Islim conveyed that their main objective throughout the bankruptcy proceedings had been to maximize returns for all creditors and expressed satisfaction that both the bankruptcy plan and the settlement with the New York Attorney General had received court approval.
The legal action against Genesis was initially initiated by the New York Attorney General’s office in October 2023. The scope of the lawsuit was later broadened to include the Digital Currency Group, its CEO Barry Silbert, and Soichiro Moro, the former CEO of Genesis. Despite the settlement with Genesis, James clarified that the terms specifically pertain only to Genesis, and the litigation against the other accused parties, along with the Gemini Trust Company, would continue.
This recent settlement with Genesis is part of a broader initiative by the New York Attorney General’s office to take legal action against cryptocurrency firms operating within the state without proper oversight. For instance, in 2023, James’ office sued KuCoin for functioning as an unregistered exchange and asserted at that time that Ether (ETH) was a security. That lawsuit ended in a settlement requiring KuCoin to pay $22 million.
The Attorney General’s office took legal measures against Alex Mashinsky, the former CEO of Celsius, accusing him of concealing the platform’s severe financial struggles. Mashinsky is also facing criminal charges in the Southern District of New York, relating to allegations of securities fraud, wire fraud, and conspiracy to commit fraud. His trial is scheduled to begin in January 2025.
The legal actions highlight James’ continued vigilance in regulating the cryptocurrency sector in New York, aiming to protect investors from fraudulent activities and ensure a transparent marketplace. The settlement with Genesis signifies a significant win for the New York Attorney General, reinforcing the state’s stringent stance against financial misconduct in the evolving crypto market.
As regulatory scrutiny increases, firms operating within the cryptocurrency industry are forced to adhere to stricter compliance guidelines. This trend is not only evident in New York but reflects a broader global movement toward tighter regulation of digital currencies.
The case against Genesis and other cryptocurrency firms underlines the crucial need for accountability and transparency in the financial industry, particularly in newer, less-regulated markets such as digital currencies. The ongoing legal battles and settlements serve as a deterrent against fraudulent activities and emphasize the importance of robust regulatory frameworks to protect investors’ interests.
24 thoughts on “NY AG Secures $2B Settlement with Genesis for Defrauded Victims”
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billion sounds impressive but what about the people’s financial lives that were ruined? This doesn’t fix that.
Just another case of too little, too late. The regulatory body should have been more proactive!
Why didnt the Attorney General crack down sooner? This only came after billions were lost.
What a victory for investor protection! Kudos to Letitia James for her unwavering diligence!
This just highlights the wild west nature of the crypto world. Investors need way stronger protections!
Even with a $2 billion settlement, the damage caused by Genesis can’t just be undone. Investors deserve more justice!
Fantastic work by the NY Attorney General! This $2 billion settlement is a significant win for all investors. 🎉💼
Letitia James is doing an outstanding job! This settlement will surely boost investor confidence in the crypto market.
Why only Genesis? The other named parties should have been included in this settlement to make a real impact.
What a disaster. How can investors ever trust the cryptocurrency market with such widespread fraud?
The whole situation is disgusting. Fines don’t deter crime; jail time does. Wheres the prison sentence for these execs?
Deceitful practices should lead to jail, not just penalties. This outcome feels too lenient.
Incredible! Letitia James is setting a great example for regulatory bodies everywhere! 🚀⚖️
Hats off to Letitia James! This settlement is a win-win for investors and the integrity of the financial market! 🎉💼
Is this settlement really a win? Genesis is banned in NY, but what about elsewhere? They can still operate globally.
What a fantastic outcome! Letitia James is proving that accountability is key in the crypto world! 💪
Bravo to the NY Attorney General for holding Genesis accountable! This is a big win for transparency and regulation in the crypto space.
The trust in the crypto market is shattered, and this settlement does little to repair it.
Kudos to Letitia James! This is the kind of accountability the crypto world needs!
Incredible work by Letitia James and her team! This settlement is a huge win for transparency in the crypto industry!
What an achievement! This outcome shows the power of persistent legal effort in protecting investor interests! 👏⚖️
This is incredible news for the investors who were defrauded! Kudos to the NY Attorney General’s office for their relentless efforts! ⚖️👏
Great news for all those who invested in Genesis! This settlement shows that justice can prevail!
Banning Genesis from NY doesnt mean much if they can continue shady practices elsewhere. This problem isnt solved.