Largest Crypto Settlement in State History
New York State Attorney General Letitia James has reached a $2 billion settlement with Genesis Global, a major player in the cryptocurrency industry. The settlement aims to compensate investors who lost money in the collapse of Gemini Earn, a lending program offered by Gemini, a cryptocurrency exchange.
Background
Last year, the New York Attorney General sued Gemini, Genesis, and Digital Currency Group (DCG) for allegedly hiding $1.1 billion in losses and misleading investors. The lawsuit was later amended to include more investors, increasing the alleged losses to $3 billion.
Genesis Liquidation and Settlement
In January, Genesis filed for bankruptcy protection. Yesterday, a bankruptcy court approved a plan to liquidate Genesis and return about $3 billion to creditors.
Settlement Details
The settlement with the New York Attorney General will create a “Victims’ Fund” for DCG creditors, pending bankruptcy court approval. The fund will be used to compensate investors who lost money in Gemini Earn.
Attorney General’s Statement
“When investors lose money due to fraud and manipulation, they deserve justice,” said Attorney General James. “This settlement is a step towards ensuring that victims have some recourse.”
Implications for Cryptocurrency Regulation
The settlement highlights the need for greater oversight and regulation in the cryptocurrency industry. The New York Attorney General has been a vocal advocate for stronger regulation, arguing that it is necessary to protect investors and prevent future losses.
