Cryptocurrencies

New York State Attorney General Letitia James announced that her office has obtained a settlement of…

New York State Attorney General Letitia James announced that her office has obtained a $2 billion settlement with cryptocurrency company Genesis to compensate defrauded investors.

In a May 20 notice, New York prosecutors said the bankruptcy court approved a $2 billion settlement between authorities, Genesis Global Capital, Genesis Asia Pacific and Genesis Global Holdco. The settlement requires the money to be returned to Genesis investors and prohibits the company from operating in New York.

James claimed that Genesis was “lying and deceiving investors” who had sent more than $1.1 billion to the platform through the Gemini Earn program. Cointelegraph contacted a Genesis spokesperson, who referred to the company’s May 17 statement.

“Our goal throughout this process has been to maximize value for all creditors, and we are pleased that the court has approved both the (bankruptcy plan) and the NYAG settlement agreement,” said Dirar Islam, interim CEO of Genesis.

Source: New York Attorney General Letitia James

The New York Attorney General’s Office filed a lawsuit against Genesis in October 2023, later expanding it to include the cryptocurrency group, its CEO Barry Silbert, and former Genesis CEO Soichiro Moro. James said the terms of the settlement apply only to Genesis, and the lawsuit will continue against the remaining defendants and Gemini Trust Company.

Related: The filings shake up the New York Attorney General’s case against Genesis, Gemini

The Genesis settlement represents the latest in a series of lawsuits filed by New York AG against cryptocurrency companies operating in the state. James’ office sued KuCoin in 2023 for operating as an unregistered exchange — also claiming at the time that Ethereum (ETH) served as a security — and settled with the company for $22 million.

New York AG also filed a lawsuit against former Celisus CEO Alex Mashinsky for allegedly concealing the platform’s “poor financial condition.” Mashinsky is currently facing criminal charges in the Southern District of New York for securities fraud, wire fraud and conspiracy to commit wire fraud, and is expected to stand trial in January 2025.

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