New York Attorney General concludes $2b Genesis settlement

by

As an analyst with a background in financial regulation and digital assets, I view this settlement between New York Attorney General Letitia James and Genesis as a significant development in the evolving regulatory landscape for cryptocurrencies.

Letitia James, the New York Attorney General, has secured a $2 billion deal in resolution with Genesis, a subsidiary of Digital Currency Group.

The Attorney General’s office announced in a press release that New York has reached a settlement with a crypto lender, intending to compensate affected creditors and serving as a reminder of the potential risks and repercussions arising from inadequate regulation of digital assets and the cryptocurrency market.

With the support of Barry Silbert’s Digital Currency Group (DCG), Genesis stood out as one of the prominent crypto lending companies, collaborating with Gemini Exchange to offer a yield-generating product named Gemini Earn.

In 2022, Genesis came close to bankruptcy due to the failure of Terraform Labs’ blockchain project founded by Do Kwon and the fall of Sam Bankman-Fried’s FTX business empire. This turn of events sparked a public feud with Gemini, who alleged that Genesis had swindled over 100,000 investors under their platform.

Following the dispute, New York Attorney General Letitia James filed a lawsuit against DCG, Genesis, and Gemini in October 2021, accusing them of misleading investors and failing to provide required disclosures for the Earn program, which could result in damages totaling $1 billion.

Settlement terms

According to crypto.news, I, as an analyst, have come across a report where James and her team pursued a claim for $2 billion in a subsequent lawsuit, citing similar allegations of violations. Notably, the settlement between New York and Genesis didn’t encompass Gemini, and this arrangement was previously sanctioned by the bankruptcy court presiding over the firm’s Chapter 11 restructuring process.

Additionally, the contract stipulated the establishment of a fund to aid approximately 30,000 users assumed to have invested over a billion dollars with the cryptocurrency firm. The company is prohibited from operating in New York state.

In accordance with the stated conditions, Genesis hasn’t explicitly refuted or acknowledged the accusations of fraud and investor manipulation brought forth by AG James and New York State. The firm has previously reached a settlement with the U.S. Securities and Exchange Commission over allegations of civil misconduct related to Gemini Earn.

Read More

2024-05-20 20:42