The New York State Attorney General’s Office has established a victim fund in its settlement with Genesis. The fund will receive up to $2 billion from Genesis’ remaining assets for distribution, in order to fully and fairly compensate Genesis creditors for their actual losses, until the fund is depleted. Will the hefty fines cause GBTC’s rebound to be suppressed again?
(Genesis has been authorized by the court to sell over $1.3 billion GBTC)
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Genesis reaches $2 billion settlement with the New York State Attorney General’s Office
Multiple cryptocurrency enforcement actions by the New York Attorney General’s Office
Genesis reaches $2 billion settlement with the New York State Attorney General’s Office
According to an official announcement, New York State Attorney General Letitia James has announced a $2 billion settlement agreement with the bankrupt lending platform Genesis to compensate defrauded investors.
The bankruptcy court has approved the settlement between the authorities and Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco, and has banned Genesis from operating in New York. This is also the largest settlement amount in New York State’s history against a cryptocurrency company, with over $2.5 billion in fines imposed on the exploitative cryptocurrency platforms to date.
Letitia James stated:
Genesis has been “lying and deceiving investors,” and these investors have transferred over $1.1 billion to the platform through the Gemini Earn program. Once again, we are witnessing the potential consequences and losses caused by the lack of regulation within the cryptocurrency industry.
The Office of the Attorney General (OAG) has established a victim fund in its settlement with Genesis, which will receive up to $2 billion from Genesis’ remaining assets for distribution, in order to fully and fairly compensate Genesis creditors for their actual losses, until the fund is depleted.
Multiple cryptocurrency enforcement actions by the New York Attorney General’s Office
Over the past two years, due to the closure of multiple cryptocurrency platforms, the New York Attorney General’s Office has taken multiple cryptocurrency enforcement actions. It filed a lawsuit against Genesis in October 2023, subsequently expanding the scope of the lawsuit to include Digital Currency Group (DCG), its CEO Barry Silbert, and former Genesis CEO Soichiro Moro.
(Gemini and DCG sued by New York enforcement agencies! Allegedly defrauded users of $1.1 billion by not disclosing financial risks)
In 2023, it sued the veteran exchange KuCoin, accusing it of operating without registration and claiming that ETH is a security.
(KuCoin pays $22 million settlement and exits New York)
The New York Attorney General also filed a lawsuit against former Celsius CEO Alex Mashinsky, alleging that he concealed the platform’s “dire financial condition.” Mashinsky currently faces criminal charges in the Southern District of New York, including securities fraud, wire fraud, and conspiracy to commit fraud, with a trial expected to begin in January 2025.
Letitia James further noted in the announcement that the settlement terms only apply to Genesis, and the lawsuits against the other defendants and Gemini Trust will continue.
GBTC
Gemini
Genesis
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