Digital Currency Group (DCG) subsidiary Genesis has reached a $2 billion settlement with the New York Attorney General's office following extensive discussions over allegations of engaging in fraud and investors' manipulations. Interestingly, the agreement would also stop Genesis operations in the New York digital assets markets.
The settlement news, which is by far the largest against a cryptocurrency company in the state's history, was made public via a press release from the Attorney General’s office, which disclosed that the agreement aims to protect New York investors and highlights the tangible impacts of inadequate regulation in the digital assets space.
Recall that UPay had previously hinted at the possibility of settlement with the New York Attorney General following a U.S. bankruptcy judge's approval to implement Genesis’s Chapter 11 repayment plan despite the collapsed exchange's prior bankruptcy declaration.
New Settlement Terms
According to the settlement terms, Genesis was mandated to create a victim fund to support defrauded investors, consisting of over 29,000 New Yorkers who invested more than $1.1 billion in Genesis through the Gemini Earn investment program.
New York Attorney General Letitia James emphasized that justice demands that when investors suffer losses following manipulation and fraud, they should be compensated adequately for their losses to make them whole again.
“This historic settlement is a major step toward ensuring the victims who invested in Genesis have a semblance of justice. Once again, we see the real-world consequences and detrimental losses that can happen because of a lack of oversight and regulation within the cryptocurrency industry. New York investors deserve the peace of mind that comes from a properly regulated marketplace, and that is something my office will always act to achieve,” The Attorney General added.
Genesis Reaction To New Settlement Plans Heightens Suspicions
Genesis neither admitted to nor denied the claims made by Attorney General James and the state of New York regarding investor manipulation and fraud, heightening existing suspicions about the cryptocurrency lender.
Meanwhile, earlier this year, the embattled crypto exchange had also settled with the United States Securities and Exchange Commission (SEC) based on civil misconduct charges with Gemini Earn levied against the imploded trading platform by the U.S. regulatory body.
The above sums up Gemini's heightening woes amid its already bankrupt state. Affected creditors will undoubtedly keep a close tab on the collapsed trading platform to see how it tends to satisfy all settlement plans hovering around it.