‘Historic Settlement’: Bankrupt Crypto Lender Genesis To Repay $2 Billion To Alleged Defrauded US Investors

Bankrupt lender Genesis has agreed to repay $2 billion to investors it allegedly defrauded across the United States, New York prosecutors announced Monday.

New York Attorney General Letitia James said the agreement will create a victims’ fund that will benefit hundreds of thousands of investors and creditors, including at least 29,000 New Yorkers. The settlement, which is pending bankruptcy court approval, is the largest-ever national settlement with a cryptocurrency company, the paper said. press release.

“If investors have suffered losses due to fraud or manipulation, they should be recovered,” James said in a statement. “This historic settlement is a major step towards ensuring justice for the victims who invested in Genesis. The lack of oversight and regulation in the crypto industry has led to real-world harm and harmful losses. New York investors deserve the peace of mind that comes from a properly regulated market, and my office will always act to achieve that. Masu.”

The agreement also prohibits Genesis from doing business in New York, reinforcing the state’s stance on stricter oversight of the industry. A victims’ fund will be established from Genesis’ remaining assets to fully repay defrauded investors and creditors. The fund will begin making payments after all bankruptcy-related payments are completed and could total up to $2 billion based on the current value of the digital assets, the release said. (Related: Two brothers educated at prestigious universities stole $25 million worth of cryptocurrency in 12 seconds, federal authorities claim)

The settlement not only addresses immediate compensation, but also advances Mr. James’ ongoing campaign against predatory practices in the crypto space. Her office has already secured more than $2.5 billion from deceptive crypto operations, according to the release. The lawsuit against Genesis and its partners stems from accusations that they hid large losses from investors, causing significant financial harm. This litigation has now expanded to include other key persons and entities within Genesis and will continue in parallel with implementation of this settlement.