Besides Ethereum ETFs, there was another $200 million event last night
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Besides Ethereum ETFs, there was another $200 million event last night
The $2 billion settlement agreement will establish a "victims fund" to distribute payments to the company's creditors.
Navigating Web3 tides with focused insightsSource: bitcoinist
Translation: Blockchain Knight
The New York State Attorney General's Office has reached a $2 billion settlement with the bankrupt crypto asset lending platform Genesis Global Capital.
Approved by a federal bankruptcy judge, the settlement will establish a victims fund to compensate thousands of New Yorkers and other investors who lost money through the Genesis platform.
New York Attorney General Letitia James announced the agreement on Monday, calling it the largest settlement ever reached by the state with a crypto asset company.
The settlement resolves allegations that Genesis and its affiliates concealed an $1.1 billion loss from investors in the "Gemini Earn" program.
Attorney General James said: "When investors suffer losses due to fraud and manipulation, they deserve compensation. This historic settlement is a crucial step toward ensuring victims who invested in Genesis are treated fairly."
Prior to the settlement, the Attorney General's Office filed a lawsuit in October 2023, accusing Genesis and other defendants of defrauding hundreds of thousands of investors nationwide.
In February, the lawsuit was expanded to include Genesis’s parent company DCG, DCG CEO Barry Silbert, and former Genesis CEO Soichiro Moro.
Under the terms of the agreement, the crypto lending firm will not admit to any wrongdoing. Nevertheless, litigation against the remaining defendants and Genesis’s former business partner Gemini Trust Company will continue.
The $2 billion settlement will create a "victims fund" to distribute payments to the company's creditors, including at least 29,000 individuals who invested more than $1.1 billion in the company's "Gemini" program.
The settlement requires Genesis to contribute an additional $2 billion to the fund if the remaining assets from the company’s bankruptcy estate are insufficient to fully compensate these creditors.
Genesis’s collapse is closely tied to the high-profile failures of cryptocurrency exchange FTX and its sister trading firm Alameda Research at the end of 2022.
Reports indicate that prior to its bankruptcy, the company extended hundreds of millions of dollars in unsecured loans to Alameda and lent $2.4 billion to the now-defunct crypto hedge fund Three Arrows Capital.
The bankruptcy court's ruling on Friday approving Genesis’s repayment plan also marks a significant step forward in recovering funds for victims across the crypto industry.
Attorney General James has pledged to continue her office’s efforts to strengthen oversight and regulation within the crypto sector, having already secured over $2.5 billion in settlements from other predatory platforms.
James concluded: "Once again, we see how the lack of oversight and regulation in the crypto industry can lead to real-world consequences and harmful losses."
"Investors in New York should be confident in a properly regulated market—that is the goal my office will continue striving to achieve."
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