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Failed cryptocurrency lender Genesis has won court approval of its bankruptcy liquidation plan to return around $2 billion in cash and cryptocurrency to its defrauded customers, the New York Attorney General said in a statement Monday.
Genesis and its business partner, Gemini Trust, have come under intensified regulatory scrutiny in recent months over allegations that the two offered and sold unregistered securities to retail investors through their now-defunct Earn product. Genesis had filed for bankruptcy in January 2023.
“This historic settlement is an important step in ensuring that the victims who invested in Genesis have a semblance of justice,” said New York Attorney General Letitia James. “Once again, we see the real-world consequences and detrimental losses that can occur due to the lack of oversight and regulation within the cryptocurrency industry.”
In addition to the restructuring plan, the agreement prohibits Genesis from operating in New York, according to the state attorney's office. He crypto-firm-genesis” target=”_blank”>deal It also created a fund for victims made up of at least 29,000 New York residents who together donated more than $1.1 billion to Genesis through its Gemini Earn product.
Customers have had their cryptocurrencies locked on the platform since withdrawals stopped in November 2022. Now, the settlement has established a fund for victims, which will receive the assets still within the Genesis estate after they are made. the initial bankruptcy distributions to creditors. If those creditors are not repaid based on current digital asset values, the fund will receive up to $2 billion of Genesis' remaining assets.
