The Office of the Attorney General settles with Genesis, fines $2 billion setting a record in New York State.

The New York Attorney General's Office has established a victim fund in a settlement with Genesis, which will receive up to $2 billion from Genesis's remaining assets for distribution to fully and fairly compensate Genesis creditors for their actual losses until the victim fund is depleted. Will the hefty fine lead to another round of selling pressure on the recovering GBTC?

Genesis has been granted court approval to sell over $1.3 billion worth of GBTC

Genesis Reaches $2 Billion Settlement with New York Attorney General

According to the official announcement, New York 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 authorities' settlement with Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco, prohibiting Genesis from operating in New York. This marks the largest settlement amount against a crypto company in New York State's history, with over $2.5 billion in fines imposed on predatory cryptocurrency platforms to date.

Letitia James stated:

Genesis has been "lying and deceiving investors," with investors funneling over $1.1 billion into the platform through the Gemini Earn program. Once again, we are seeing the potential consequences and losses due to the lack of regulation within the crypto industry.

The OAG's settlement with Genesis has established a victim compensation fund, which will receive up to $2 billion from Genesis' remaining assets for distribution to fully and fairly compensate Genesis creditors for their actual losses until the victim fund is depleted.

New York Attorney General's Various Crypto Enforcement Actions

Over the past two years, with several crypto platforms collapsing, the New York Attorney General's office has taken multiple crypto enforcement actions, starting with the lawsuit against Genesis in October 2023, later expanding 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! Alleged Failure to Disclose Financial Risks, Accused of Defrauding Users of $1.1 Billion

In 2023, KuCoin, an old exchange, was sued for operating without registration and claiming that ETH is a security.

KuCoin Pays $22 Million in Settlement, Exits New York, USA

The New York Attorney General also sued former Celsius CEO Alex Mashinsky, accusing him of concealing the platform's "poor 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 scheduled for January 2025.

Letitia James further noted in the announcement that the settlement terms only apply to Genesis, and lawsuits against the remaining defendants and Gemini Trust will proceed.