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New York AG announces a $2 billion settlement with Genesis to repay creditors

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New York AG announces a $2 billion settlement with Genesis to repay creditors

New York Attorney General Letitia James announced a large Genesis bankruptcy settlement on Monday. The settlement creates a “Victims Fund” from Genesis’ residual assets to reimburse creditors.

Unless digital asset prices cover losses, the fund will get up to $2 billion to reimburse creditors. Genesis’ parent firm, Digital Currency Group, challenged this settlement, but a bankruptcy court approved it last Friday.

The February settlement forces Genesis to stop doing business in New York and bans future operations. The Attorney General called this the “largest settlement against a crypto company in state history.”

Attorney General James said, “This historic settlement ensures victims who invested in Genesis receive justice.” It shows the effects of crypto unregulation. NY investors deserve a well-regulated market, which my office will constantly pursue.”

Last October, the NYAG sued DCG, Gemini, and Genesis. Gemini and Genesis organized two “fraudulent schemes” using Gemini Earn with DCG, according to the complaint.

This deal helps Genesis finish bankruptcy. Genesis’ liquidation plan and settlement were authorized by a court, advancing its financial recovery.

After DCG contested the arrangement earlier this year, it was approved. Despite this, the deal created the Victims Fund and compensated creditors.

The NYAG underlined the settlement’s wider crypto industry implications. To protect investors from major losses, Genesis’ failure highlights the need for tougher regulation. This settlement seeks damages and emphasizes the need for strong cryptocurrency laws.

Attorney General James said, “New York investors deserve peace of mind from a well-regulated marketplace. Our office will constantly aim for this.” The Genesis settlement and New York business restriction are vital to investor protection and market integrity.

The NYAG’s commitment to holding crypto firms responsible is reinforced by this unprecedented settlement, which compensates creditors.

The alleged DCG-facilitated cooperation between Gemini and Genesis illustrates the bitcoin market’s complexity and hazards, highlighting the necessity for attentive regulatory monitoring.

Two months ago, Genesis Global has agreed to pay $21 million in civil penalties for engaging in the unregistered offer and sale of securities through the Gemini Earn program.

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James Wilson is a crypto writer and researcher with over 5 years of experience in the industry. He is a graduate of the University of California, Berkeley, where he studied computer science and economics. After graduating, he worked as a software engineer at a major tech company before transitioning to a career in crypto.