New York AG reaches $2B for ‘fraud victims’ with Genesis
New York State Attorney General Letitia James has announced that her office has reached a $2 billion settlement with the Genesis cryptocurrency company to compensate defrauded investors.
In a May 20 announcement, the New York AG's bankruptcy court approved a $2 billion settlement between authorities and Genesis Global Capital, Genesis Asia Pacific and Genesis Global Holco. The settlement would require the money to be returned to Genesis investors and would bar the company from operating in New York.
James said there were “liars and investors” who sent more than $1.1 billion to the platform through the Gemini Income program. Cointelegraph contacted a Genesis spokesperson and cited the company's May 17 statement.
“Our goal in this proceeding was to maximize value for all creditors, and we are pleased that the court has upheld both of ours. [bankruptcy plan] and the NYAG settlement agreement,” said Derar Islam, interim CEO of Genesis.
The New York Attorney General's Office filed charges against Genesis in October 2023, which later included Digital Currency Group, CEO Barry Silbert, and former Genesis CEO Soichiro Moron. James said the terms of the settlement apply only to Genesis, and that the lawsuit will continue against the remaining defendants and Gemini Trust Co.
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The Genesis settlement marks the latest in a series of lawsuits brought by the New York AG against crypto companies operating in the state. James' office sued KuCoin in 2023 for operating an unregistered exchange – also claiming that Ether (ETH) had security at the time – and settled with the company for $22 million.
The New York AG also filed charges against former Celsius CEO Alex Mashinsky for concealing the platform's “troubled financial situation.” Mashinsky is currently indicted in the Southern District of New York on charges of securities fraud, wire fraud and conspiracy to defraud and is expected to go on trial in January 2025.
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