Genesis to settle lawsuit filed by New York
Bankrupt cryptocurrency company Genesis Global Holdco and the New York Attorney General’s Office have reached a settlement after being sued last year for allegedly defrauding New Yorkers of more than $1 billion.
Genesis Global Holdco filed a motion Thursday in the U.S. Bankruptcy Court for the Southern District of New York asking a judge to approve the settlement.
“After months of intense negotiations, the Debtor and NYAG have reached a resolution to the NY Action,” Genesis said in a court filing.
New York Attorney General Letitia James sued Gemini, Genesis and their parent company, Digital Current Group, in October over the Gemini cryptocurrency lending program. Genesis and Gemini will begin offering the program to individual investors in 2021, she said. enable Earn up to 7.4% APY.
Thursday’s settlement agreement will allow the debtors to avoid “extensive litigation costs” and focus on making the most of recoveries from creditors, they said. NYAG also “agreed to receive payment under the settlement agreement only if all of the debtor’s general unsecured creditors are made whole,” according to court documents.
SEC settlement
Genesis Global Holdco last week stable It agreed to pay $21 million in a lawsuit filed by the Securities and Exchange Commission.
The SEC said the Gemini Earn program was an unregistered program. stock It provides a place to raise “billions of dollars” worth of cryptocurrency from thousands of investors. The SEC said Genesis didn’t have enough liquid assets to cover the one-year withdrawal costs for the program, leaving investors out dry. James, of New York, said Genesis hid $1.1 billion in losses.
Apply for Genesis Global Holdco bankruptcy It was placed into protection in January 2022 after suffering a financial blow from the collapse of cryptocurrency hedge fund Three Arrows Capital and cryptocurrency exchange FTX.
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About the author
Sarah is a reporter for The Block covering policy, regulation and legal events. Sarah was previously a reporter writing about securities regulation at CQ Legal, where she first began her reporting on cryptocurrencies. She Sarah has also written for The Bond Buyer and American Banker, among other financial publications. She graduated from the University of Missouri with a degree in Print and Digital Journalism. Sarah lives in Washington, DC and she is an avid coffee lover. You can follow her on Twitter @ForTheWynn.
