The Office of the Attorney General reaches a settlement with Genesis, imposing a record-breaking fine of $2 billion in the state of New York.
The New York State Attorney General’s Office has established a victim fund in its settlement with Genesis, which will receive up to $2 billion from Genesis’ remaining assets for distribution to compensate Genesis creditors for their actual losses in full and fairly, until the victim fund is exhausted. Will the hefty fine cause GBTC to experience selling pressure again?
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Genesis has been permitted by the court to sell over $1.3 billion worth of GBTC
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Genesis settles with New York State for $2 billion
Multiple cryptocurrency enforcement actions by the New York Attorney General’s Office
Genesis settles with New York State for $2 billion
According to an official announcement, New York State Attorney General Letitia James has announced a $2 billion settlement agreement with bankrupt lending platform Genesis to compensate defrauded investors.
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The bankruptcy court has approved the settlement between the authorities and Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco, and has prohibited Genesis from operating in New York. This is also the largest settlement amount in New York’s history against a cryptocurrency company, with over $2.5 billion in fines imposed on self-dealing cryptocurrency platforms to date.
Letitia James stated:
Genesis has been “lying and deceiving investors,” who have deposited over $1.1 billion into the platform through the Gemini Earn program. Once again, we see the potential consequences and losses resulting from the lack of regulation in the cryptocurrency industry.
The Office of the Attorney General (OAG) has established a victim fund in its settlement with Genesis, which will receive up to $2 billion from Genesis’ remaining assets for distribution to compensate Genesis creditors for their actual losses in full and fairly, until the victim fund is exhausted.
Multiple cryptocurrency enforcement actions by the New York Attorney General’s Office
Over the past two years, the New York Attorney General’s Office has taken multiple enforcement actions against various cryptocurrency platforms. Starting in October 2023, it filed a lawsuit against Genesis, subsequently expanding the lawsuit to include Digital Currency Group (DCG), its CEO Barry Silbert, and former Genesis CEO Soichiro Moro.
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Gemini and DCG sued by New York enforcement agencies! Alleged fraud of $1.1 billion by concealing financial risks from users
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In 2023, it sued the veteran exchange KuCoin, accusing it of operating without registration and claiming that ETH is a security.
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KuCoin pays $22 million settlement and exits New York, USA
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The New York Attorney General also filed a lawsuit against former Celsius CEO Alex Mashinsky, accusing him of concealing the platform’s “dire financial condition.” Mashinsky is currently facing criminal charges in the Southern District of New York, involving securities fraud, wire fraud, and conspiracy to commit fraud, with a trial scheduled to begin in January 2025.
Letitia James further noted in the announcement that the settlement terms only apply to Genesis, and the lawsuits against the remaining defendants and Gemini Trust will continue.
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Gemini
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