In a historic win for deceived investors, New York Attorney General Letitia James announced a $2 billion settlement with the insolvent cryptocurrency corporation Genesis Global Capital and its subsidiaries.
This is the largest settlement against a cryptocurrency corporation in New York State history. It seeks to maximize recovery for investors, including at least 29,000 New York residents who lost more than $1.1 billion through the Gemini Earn investing scheme.
Notably, the transaction is awaiting clearance by a bankruptcy court. A victims’ fund will be established to recompense duped investors after proper approval.
Genesis Crypto to Settle New Yorkers
The Victims’ Fund will receive payouts from Genesis’ residual assets following the initial bankruptcy disbursements to creditors. Suppose creditors do not get total compensation based on current digital asset valuations. In that case, the fund will pay up to $2 billion to offset their losses.
Attorney General James added, “When investors suffer losses due to fraud and manipulation, they deserve compensation.”
This settlement follows Attorney General James’ lawsuit filed in October 2023. It accused Genesis and the other defendants of concealing substantial losses from investors. In February, it was enlarged to include further charges that they scammed individuals and institutions out of $2 billion.
The revised settlement notice also stated that the action would proceed against the other defendants, including Genesis’ former business partner, Gemini Trust Company, LLC. Under the terms of the settlement, Genesis is prohibited from operating in New York.
General James has played a prominent role in attempts to regulate the bitcoin business and safeguard investors. To date, her office has allegedly recovered more than $2.5 billion from unscrupulous bitcoin platforms.