While preparing to vigorously defend itself against prosecution by the New York District Attorney’s office, Genesis has finally opted for an out-of-court settlement. Indeed, Genesis Global, the defunct crypto lender recently declared bankrupt, has reached a settlement with the New York State Attorney General.
Genesis agrees to settle long-standing case with New York Attorney General’s office
The case dates back to October 2022, when the Attorney General of New York, Letitia James filed complaint against Genesis Global and its partners Gemini Trust and Digital Currency Group.
The New York Attorney General’s Office had accused Genesis Global and its partners of defrauding investors of more than one billion dollars via the Earn from Gemini.
According to the indictment, Genesis and collaborators would have concealed the risks of this program to some 230,000 investors, including 29,000 New Yorkers. They allegedly presented the program as risk-free, whereas in fact the funds were used to finance risky operations.
In an unexpected twist, Genesis has agreed to cooperate with the Attorney General’s office in order to terminate legal proceedings. The agreement, signed on February 8, 2023, provides for the cessation of Genesis in New York, without the company acknowledging any wrongdoing. The main objective is to save Genesis considerable legal costss, in order to concentrate available funds on reimbursing injured customers.
Indeed, the terms of the settlement give priority to returning assets to former users of the Earn program, in relation to the payment of potential fines to the State of New York. Court documents do not indicate whether Genesis will pay any financial penalties as part of the settlement.
The settlement with the Attorney General’s office could facilitate Genesis’ efforts to fairly repay its creditors via bankruptcy proceedings. However, Genesis still faces class action lawsuits that could complicate the process.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.