The bankrupt lender Genesis has agreed to repay $2 billion to alleged defrauded investors nationwide, New York prosecutors announced Monday.
New York Attorney General Letitia James stated that the agreement would initiate a victims’ fund, benefiting hundreds of thousands of investors and creditors, including at least 29,000 New Yorkers. This settlement, which awaits approval from a bankruptcy court, marks the largest-ever state settlement with a cryptocurrency company, according to the press release.
“When investors suffer losses because of fraud and manipulation, they deserve to be made whole,” James said in a statement. “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.”
Genesis to pay $2 billion to victims of alleged cryptocurrency fraud. https://t.co/l41biorTto
— CBS New York (@CBSNewYork) May 20, 2024
The agreement also prohibits Genesis from operating in New York, reinforcing the state’s stance on rigorous industry oversight. It establishes a Victims’ Fund from Genesis’ remaining assets to fully reimburse defrauded investors and creditors. The fund will begin payouts after all bankruptcy-related payments are completed, potentially totaling up to $2 billion, based on the current value of digital assets, the release stated. (RELATED: Two Brothers Educated In Prestigious University Stole Cryptocurrency Worth $25 Million In 12 Seconds, Feds Allege)
This settlement not only addresses immediate compensations but also advances James’ ongoing campaign against predatory practices in the cryptocurrency sector. Her office has already secured over $2.5 billion from deceptive crypto operations, according to the release. The legal actions against Genesis and its partners arise from accusations that they hid significant losses from investors, causing considerable financial damage. The lawsuit, now expanding to include other key figures and entities within Genesis, will continue alongside the implementation of this settlement.
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