Genesis Agrees to $2Bn Settlement in ‘Gemini Earn Program’ Fraud Case

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Crypto firm Genesis has reached an agreement with the Office of the Attorney General for the State of New York. According to a May 20 notice shared by Attorney General Letitia James, the firm will pay $2 billion in settlement to compensate investors who fell victim to its fraudulent activities.

James said that a bankruptcy court has given the go-ahead for Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco to settle with authorities with the said amount.

The agreement states expressly that funds must be returned to Genesis investors. It also added that Genesis is henceforth banned from operating in New York.

According to the AG, Genesis’ Gemini Earn Program was a scheme that the firm used to deceive investors, who ultimately sent over $1.1 billion to the platform.

About the settlement, a company spokesperson has pointed to an earlier press release, sharing the company’s reorganization plans as well Genesis’ excitement about how things are turning out. The company’s interim CEO Derar Islim was quoted as saying:

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“Our goal throughout this process has been to maximize value for all creditors, and we are gratified that the court approved both our [reorganization plan] and the NYAG settlement agreement.”

Crypto Firm Genesis Settles But There’s A Catch

Recall that the New York Attorney General’s office initially filed its lawsuit against Genesis alone. That was in October 2023. However, it later expanded the suit to include the Digital Currency Group, its CEO, Barry Silbert, and former Genesis CEO Soichiro Moro.

Interestingly, the latest development as regards the settlements does not cover all defendants. According to James, the settlement terms only apply to Genesis. This means that the lawsuit actively continues against all other defendants and the Gemini Trust Company.

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Meanwhile, it might be worth noting that the Genesis lawsuit is only one of many similar suits that the New York AG has brought up against crypto firms in the state. Last year, the office also filed a suit against KuCoin for operating as an unregistered exchange. That lawsuit would later see the firm settle with the NYAG for $22 million.

The office also has an active lawsuit against former Celsius CEO Alex Mashinsky. Mashinsky allegedly hid Celsius’ financial position and currently faces criminal charges bordering on securities fraud, wire fraud, and conspiracy to commit fraud. His trial is expected to begin in early 2025.

Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence before making any trading or investment decisions.