New York Attorney General Letitia James has successfully secured a $2 billion settlement with bankrupt cryptocurrency firms Genesis Global Capital, LLC, Genesis Asia Pacific PTE, LTD., and Genesis Global Holdco, LLC. The settlement aims to maximize recoveries for investors defrauded by these entities. Due to Genesis‘ prior bankruptcy declaration, this historic settlement requires bankruptcy court approval.
The settlement will establish a “Victims’ Fund” to compensate defrauded investors, including at least 29,000 New Yorkers who collectively invested over $1.1 billion through the Gemini Earn program. Additionally, the settlement prohibits Genesis from operating in New York, marking the largest penalty against a cryptocurrency company in the state’s history.
The settlement stems from a lawsuit filed by Attorney General James in October 2023, alleging that Genesis concealed over $1.1 billion in losses from investors. The lawsuit was later expanded in February 2024 to include additional defendants and claims, accusing Genesis and its affiliates of defrauding investors of an additional $2 billion. Although Genesis does not admit to the allegations, the suit against the remaining defendants will continue.
The “Victims’ Fund” will receive distributions from Genesis‘ remaining assets post-bankruptcy. If creditors are not fully compensated, the fund will be allocated up to $2 billion from Genesis’ assets to ensure investors receive fair compensation for their losses.
This settlement is part of Attorney General James’ broader effort to regulate the crypto industry and protect investors. Her office has previously secured significant settlements from other cryptocurrency platforms, including KuCoin, Coin Cafe, and Nexo, totaling over $50 million in fines and institutions.
