The US Bankruptcy Court for the Southern District of New York has approved the $2 billion settlement between Genesis Global and the New York Attorney General and confirmed the Amended Plan of Reorganization for the defunct company and its subsidiaries.
The settlement aims to compensate defrauded investors, including 29,000 New Yorkers who invested over $1.1 billion through the Gemini Earn program. The settlement also prohibits Genesis from operating in New York.
NYAG Letitia James said:
“This settlement provides justice for the victims who invested in Genesis and ensures they receive compensation for their losses.”
The NYAG filed a lawsuit against the firm in October 2023 lawsuit, accusing Genesis of concealing more than $1.1 billion in losses.
The lawsuit expanded in February 2024 to include claims against Digital Currency Group (DCG), its CEO Barry Silbert, and Genesis’s former CEO Soichiro Moro, alleging an additional $2 billion in investor fraud.
The NYAG’s office continues to pursue litigation against DCG and its executives. DCG filed an official objection to the settlement between Genesis and the NYAG over concerns that it did not adhere to the Bankruptcy Code and its implications for the rights of DCG as a creditor and equity holder.
The settlement with Genesis is part of Attorney General James’ ongoing efforts to regulate the crypto industry, having secured over $2.5 billion from predatory crypto platforms to date.
Reorganization plan
The court also confirmed Genesis’ amended Plan of Reorganization, which will allow for the creation of a Victims’ Fund to distribute Genesis’ remaining assets.
Creditors will receive distributions in kind to preserve the value of their original crypto rather than converting them to cash. If creditors are not fully compensated based on current digital asset values, the fund will receive up to $2 billion.
Genesis interim CEO Derar Islim said:
“We are gratified that the court approved both our Plan and the NYAG settlement agreement. We look forward to making distributions as expeditiously as possible.”
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