New York AG Secures Record $2 Billion Settlement in Crypto Case

  • New York AG Letitia James secured a $2 billion settlement with Genesis Global Capital, LLC, and related entities (collectively, “Genesis”), to resolve allegations that the bankrupt cryptocurrency firms defrauded investors, violating the Martin Act and New York Executive Law.  This settlement marks the largest ever against a cryptocurrency company in the state, according to the AG’s office.
  • As previously reported, the complaint alleged that Genesis and other defendants concealed over $1.1 billion in losses from investors in its Gemini Earn investment program, allegedly misleading them about the risks associated with their digital assets and the firm’s financial stability. Under the settlement, Genesis neither admits nor denies these allegations.
  • The settlement, which required bankruptcy court approval, established a “Victims’ Fund” to compensate investors and creditors allegedly defrauded by the scheme. The Victims’ Fund will receive up to $2 billion from Genesis’ remaining assets after the initial bankruptcy distributions.
  • Additionally, under the terms of the settlement, Genesis is permanently enjoined from violating the Martin Act and other state financial laws, and is prohibited from directly or indirectly conducting or transacting business in the State of New York.