NY AG Secures Record $2B Crypto Fraud Settlement with Genesis
The post NY AG Secures Record $2B Crypto Fraud Settlement with Genesis appeared first on Coinpedia Fintech News
In a landmark decision, New York Attorney General Letitia James has successfully brokered a $2 billion settlement with the cryptocurrency firm Genesis Global Capital. This settlement, the largest of its kind in New Yorks history, aims to compensate thousands of investors who suffered losses due to illegal practices.
New Work Sees Largest Crypto Settlement
The settlement with Genesis Global Capital, LLC, and its associated entities comes from allegations of significant financial mismanagement and deceit. According to the New York Attorney Generals office, Genesis, along with other defendants, concealed over $1.1 billion in investor losses through the Gemini Earn investment program. The settlement not only provides monetary compensation but also bans Genesis from operating in New York, ensuring that the firm cannot execute further harm.
Read more: Court Approves Genesis Globals $3 Billion Repayment Plan, Overruling DCG Challenge
In 2023, Attorney General Letitia James charged Gemini Trust, Genesis Capital, and Digital Currency Group with orchestrating a fraud scheme valued at $1.1 billion.
Attorney General James said, When investors suffer losses because of fraud and manipulation, they deserve to be made whole. This historic settlement is a major step toward ensuring the victims who invested in Genesis have a semblance of justice. Once again, we see the real-world consequences and detrimental losses that can happen because of a lack of oversight and regulation within the cryptocurrency industry. New York investors deserve the peace of mind that comes from a properly regulated marketplace, and that is something my office will always act to achieve.
The settlement provides immediate relief to harmed investors and sets a regulatory oversight in the market. The Victims Fund will directly benefit at least 29,000 New Yorkers who invested more than $1.1 billion in Genesis through the compromised Gemini Earn program. These investors will see a substantial portion of their losses returned, a move that not only delivers justice but also restores some faith.
AG James Leads Robust Crypto Enforcement
Attorney General Letitia James has led significant efforts to tighten regulations in the cryptocurrency sector. She has successfully enforced actions against major cryptocurrency platforms. Notably, she obtained over $22 million from KuCoin and $4.3 million from Coin Cafe for regulatory violations, and alongside a multistate coalition, secured $24 million from Nexo for illegal operations.
James has also pursued legal actions against high-profile entities like Celsius and directed unregistered crypto lending platforms to halt operations in New York.
Also read: Breaking: Genesis Agrees To Make Settlement With SEC Over Gemini Earn With $21 Million Penalty
The Victims Fund, established by the settlement between the Office of the Attorney General (OAG) and Genesis, will distribute payments from Genesis leftover assets after creditors initial bankruptcy claims are addressed. If these claims are not fully satisfied by the current values of digital assets, the fund will use up to $2 billion from Genesis remaining assets to fully compensate creditors for their losses until the fund is utilized.
Previously, Genesis Global Capital agreed to pay a $21 million settlement to the SEC for securities violations related to the Gemini Earn program.
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