- The New York AG’s office has secured a multibillion settlement from Genesis Global.
- The settlement will be used to create a fund for fraud victims.
- It comes two days after the court approves Genesis’ plan to distribute billions to creditors.
New York Attorney General Letitia James secured a multibillion settlement on Monday with bankrupt crypto firm Genesis Global.
The settlement stems from a sweeping lawsuit the AG’s office brought against Genesis, Digital Currency Group (DCG), and Gemini on October 19 last year, accusing the companies of defrauding 230,00 investors out of over $1 billion.
$2B Settlement for Defrauded Investors
On May 20, AG Letitia James announced that her office had secured a $2 billion settlement with Genesis Global to maximize recoveries for investors who were scammed through what she termed “fraud and manipulation.”
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“My office secured $2 billion from crypto platform @GenesisTrading for lying and cheating investors. This is the largest settlement against a crypto company in New York history. That money will go back to defrauded investors and Genesis is also banned from operating in New York,” James wrote on X.
According to the official press release on the matter, the settlement will establish a “Victims Fund” for Genesis’ creditors and resolves the Attorney General’s claims against the company for defrauding investors nationwide, including “at least 29,000 New Yorkers.”
The Victims Fund will receive distributions from the assets remaining in Genesis’ estate after bankruptcy distribution to creditors.
“If those creditors are not made whole based on today’s digital asset values, the Victims’ Fund will receive up to $2 billion from Genesis’ remaining assets. The Victims’ Fund will then make distributions to compensate Genesis’ creditors for the full and fair amounts of their actual losses until the Victims’ Fund is depleted.” The statement read.
In the meantime, Genesis’ plan to return over $3 billion in cash and assets to creditors this year was approved by the court on May 17 despite DCG’s objection. Per the approval, Gemini Earn creditors will start receiving their owed assets from as early as June.
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