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Genesis will pay $2 billion to victims of alleged cryptocurrency fraud
Bankrupt cryptocurrency lender Genesis will repay $2 billion to hundreds of thousands of investors in the United States who were defrauded by the company, New York prosecutors said Monday.
Pending approval from a bankruptcy court, the announced The settlement — the largest ever made by the state against a cryptocurrency company — will establish a victim fund for investors and creditors nationwide, including at least 29,000 New Yorkers.
“This historic settlement is an important step in ensuring that victims who invested in Genesis have some semblance of justice,” New York Attorney General Letitia James said in a statement. “Once again, we see the real-world consequences and harmful losses that can occur due to the lack of oversight and regulation in the cryptocurrency industry.”
The agreement also bars Genesis from operating in New York.
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James filed a lawsuit against Genesis in October 2023, accusing it of hiding more than $1.1 billion in losses from investors. Genesis has neither admitted nor denied the allegations outlined in the lawsuit, which continues against other defendants.
Genesis filed for Chapter 11 bankruptcy protection early last year due to falling prices and the collapse of FTX has resonated throughout the industry.
A court on Friday approved Genesis’ Chapter 11 repayment plan, including the settlement with James’ office, while rejecting a legal challenge from Digital Currency Group, the company’s parent company. The ruling paved the way for Genesis to return customer assets held on its platform since November 2022 after the collapse of other major cryptocurrency firms.
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