New York AG Secures $2B Settlement from Genesis for Defrauding Victims

A man partially covering his face with cash.

The AG’s office sued Genesis in October 2023 for allegedly defrauding investors through Gemini Earn.  Genesis neither admitted nor denied the allegations

New York Attorney General Letitia James has obtained a $2 billion settlement from bankrupt crypto lending firm Genesis Global for defrauding investors.   

James disclosed that the settlement marks one of the largest financial recoveries in the history of crypto enforcement. 

Gensis Lied and Cheated Investors

According to a notice issued on May 20, the NY Attorney General announced that a bankruptcy court had approved the $2 billion settlement between authorities and Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco. The settlement mandates the return of funds to Genesis investors and prohibits the company from operating in New York.  

Furthermore, James alleged that Genesis had been “lying and cheating investors” who sent more than $1.1 billion to the exchange through the Gemini Earn program.  

“When investors suffer losses because of fraud and manipulation, they deserve to be made whole,” said Attorney General James. “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 New York AG added.  

Lawsuit Against Genesis

In October 2023, the New York Attorney General’s office filed a lawsuit against Genesis. The lawsuit was expanded in February against Digital Currency Group (DCG), Genesis, DCG’s CEO Barry Silbert, and Genesis’ former CEO Soichiro Moro for defrauding individuals and institutions of an extra $2 billion.    

Genesis neither admits nor denies the allegations. The suit will proceed against the remaining defendants, including Gemini Trust Company.  

AG James encourages New Yorkers affected by deceptive practices in virtual asset markets to report them to OAG. She also urges crypto industry workers who may have witnessed misconduct or fraud to submit online whistleblower complaints to her office, which can be done anonymously.   

New York AG Goes After Crypto Entities

The NY AG also sued former Celsius CEO Alex Mashinsky for allegedly concealing the platform’s poor financial state. Mashinsky faces criminal charges in the Southern District of New York for securities fraud, wire fraud, and conspiracy, with a trial set for January 2025.  

Similarly, in September 2021, AG James and the SEC secured $479.9 million from GTV Media for unregistered crypto sales.