Letitia James, the attorney general for the State of New York, declared a landmark achievement as her office secured a $2 billion settlement with cryptocurrency firm Genesis, aiming to compensate defrauded investors. The agreement, approved by a bankruptcy court, mandates the return of funds to Genesis investors and imposes a ban on the company’s operations within New York. Allegations against Genesis surfaced regarding fraudulent practices linked to its Gemini Earn program, with investors reportedly losing over $1.1 billion. This settlement signifies a significant victory in the legal pursuit initiated by the New York AG against Genesis and other cryptocurrency entities operating within the state.
The genesis of the legal battle dates back to October 2023 when the New York Attorney General’s office filed a lawsuit against Genesis, later expanding it to include the Digital Currency Group, its CEO Barry Silbert, and former Genesis CEO Soichiro Moro. Despite the settlement terms applying solely to Genesis, the lawsuit continues against the remaining defendants and the Gemini Trust Company. This development underscores the rigorous regulatory scrutiny faced by cryptocurrency firms operating in New York, with the AG’s office demonstrating a commitment to safeguarding investor interests and maintaining financial integrity within the state’s crypto ecosystem.
The settlement with Genesis marks the latest in a series of legal actions initiated by the New York AG against cryptocurrency firms with operations in the state. Previous lawsuits include those against KuCoin for operating as an unregistered exchange and former Celsius CEO Alex Mashinsky for allegedly concealing the platform’s financial condition. With regulatory scrutiny intensifying, cryptocurrency firms must navigate complex legal landscapes, ensuring compliance with regulatory requirements to mitigate the risk of legal repercussions and safeguard investor trust.
