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The New York attorney general, Letitia James, has reached a groundbreaking $2 billion settlement with the bankrupt cryptocurrency lender Genesis Global, according to a May 20 announcement.
The settlement comes in the wake of allegations that Genesis had defrauded thousands of investors, including at least 29,000 New Yorkers who had contributed more than $1.1 billion through the company’s Gemini Earn scheme.
Genesis, which filed for Chapter 11 bankruptcy in the US in January 2023, recently received court approval to return approximately $3 billion in cash and cryptocurrency to its customers as part of a liquidation process. The settlement with the New York attorney general’s office marks the largest ever reached between the state and a cryptocurrency company.
Attorney General James emphasized the real-world consequences and detrimental losses that can occur due to the lack of oversight and regulation within the cryptocurrency industry. She stated that the historic settlement is a significant step towards ensuring that victims of fraud and manipulation in the crypto space receive a semblance of justice.
A long-fought battle
The lawsuit against Genesis was initially filed by James in October 2022, accusing the firm of concealing losses from investors who provided digital assets through the Gemini Earn platform. Under the terms of the settlement, Genesis has neither admitted nor denied the allegations.
The collapse of Genesis is part of a broader trend of crypto casualties, many of which were caught up in the downfall of FTX, one of the world’s largest cryptocurrency exchanges. Still, it was recently revealed that FTX unexpectedly amassed $16.3 billion, enough to repay all customers and creditors with a billion dollar surplus.
