In October 2023, the New York Attorney General (NYAG) filed a lawsuit against Genesis, Gemini, and Digital Currency Group (DCG), alleging they fraudulently took more than $1 billion from over 230,000 investors, including 29,000 New Yorkers. The NYAG accused Gemini of being aware that Genesis’ loans were undersecured and heavily tied to Alameda Research but didn’t disclose this to investors.
Attorney General Letitia James stated that the settlement reached is a significant move towards providing justice for the victims who invested in Genesis. She emphasized the tangible losses resulting from the lack of oversight and regulation in the cryptocurrency industry.
Genesis neither admits nor denies the allegations but will be prohibited from operating in New York as part of the settlement terms.
DCG, initially sued by the NYAG but excluded from the settlement, had previously objected to the process. In February, DCG argued against Genesis’ proposed settlement, claiming it unfairly favored certain creditors, bypassing U.S. bankruptcy laws.
Recently, Genesis announced its intention to return $3 billion worth of customer assets, about 77% of the total customer claims, as part of an approved bankruptcy liquidation plan. The remaining assets will go towards a Victims’ Fund, providing up to $2 billion to compensate creditors for their remaining losses.
May 2024, Cryptoniteuae
