In a landmark decision, the New York Attorney General’s office has reached a $2 billion settlement with cryptocurrency firm Genesis to compensate investors defrauded through the Gemini Earn program. Letitia James, the attorney general for the State of New York, announced the settlement on May 20, following the approval by a bankruptcy court. The agreement mandates that Genesis return the funds to investors and prohibits the company from operating in New York.
Genesis Settlement Details
James accused Genesis of “lying and cheating investors,” stating that more than $1.1 billion had been sent to the platform via the Gemini Earn program. The New York AG’s office initially filed a lawsuit against Genesis in October 2023, expanding it to include the Digital Currency Group, its CEO Barry Silbert, and former Genesis CEO Soichiro Moro. While the settlement resolves claims against Genesis, the lawsuit continues against the remaining defendants and the Gemini Trust Company.
Statements and Reactions
Genesis interim CEO Derar Islim expressed relief at the court’s approval of the bankruptcy plan and the settlement agreement. “Our goal throughout this process has been to maximize value for all creditors, and we are gratified that the court approved both our bankruptcy plan and the NYAG settlement agreement,” Islim stated.
Broader Implications
This settlement is part of a broader crackdown by the New York AG’s office on cryptocurrency firms operating within the state. Previous actions include a lawsuit against KuCoin for operating as an unregistered exchange and settling for $22 million, as well as a lawsuit against former Celsius CEO Alex Mashinsky. Mashinsky is facing criminal charges related to securities fraud, wire fraud, and conspiracy to commit fraud, with his trial set for January 2025.
Conclusion
The $2 billion settlement with Genesis underscores the ongoing efforts of the New York Attorney General’s office to hold cryptocurrency firms accountable and protect investors from fraudulent activities.
