United States of America: Reached settlement with Genesis in AG public lawsuit against cryptocurrency companies Gemini, Genesis and DCG for allegedly defrauding investors

On 20 May 2024, the New York State Attorney General (AG) announced a settlement reached with Genesis in their public lawsuit against the cryptocurrency companies Gemini, Genesis, and DCG, for alleged investor fraud. As part of the settlement, a Victims’ Fund will be established through collaboration between the Office of the Attorney General (OAG) and Genesis. Distributions from the assets remaining in Genesis’ estate after initial bankruptcy payouts to creditors will be allocated to the Victims’ Fund. If the creditors are not fully compensated based on current digital asset values, the Victims’ Fund will receive up to USD 2 billion from Genesis’ remaining assets. The Victims’ Fund will then make distributions to compensate Genesis’ creditors for their actual losses until the fund is depleted. Additionally, Genesis is banned from operating in New York. Gemini Trust Company (Gemini), Genesis Global Capital, LLC, and its affiliates (Genesis), along with Digital Currency Group, Inc. (DCG), were accused of perpetrating fraud by allegedly deceiving over 230’000 investors, resulting in losses exceeding USD 1 billion. Genesis and DCG were further alleged to have concealed their financial condition from Gemini and the public. Gemini is accused of lowering Genesis's credit rating without public announcement while continuing to promote it as low risk. Subsequent to the initial allegations, further accusations were made, asserting that the entities defrauded additional individuals and institutions of an extra USD 2 billion, bringing the total defrauded amount to over USD 3 billion. By agreeing to the settlement with the AG, Genesis neither admits nor denies the allegations of this lawsuit, and the legal action will proceed against the remaining defendants.