The New York Attorney General’s Office announced Monday that it has secured a $2 billion settlement with Genesis, a cryptocurrency lender owned by Digital Currency Group (DCG), to repay users harmed by its 2023 bankruptcy filing.
The plan was approved late Friday and will likely repay users about 77% of the cryptocurrency funds they provided to the company in return for a rate of return. wall street journal.
“If investors suffered losses due to fraud and manipulation, they deserve to be made whole,” said New York Attorney General Letitia James. She said, “This historic settlement is an important step toward ensuring that victims of Genesis investments receive justice.”
Genesis filed for bankruptcy in January 2023 after being hit by other related cryptocurrency meltdowns, including the sudden closure of popular cryptocurrency exchange FTX and cryptocurrency hedge fund Three Arrows Capital.
Over the past year, the company and parent company DCG have been locked in a public fight with cryptocurrency exchange Gemini, a former Genesis partner, over roughly $900 million owed to Gemini customers through its Gemini Earn lending platform.
As an agreement nears, Genesis received approval in February to sell approximately $1.6 billion worth of shares in the Grayscale Bitcoin Trust (GBTC) and other Grayscale cryptocurrency products. The company also agreed to a $21 million settlement with the U.S. Securities and Exchange Commission (SEC) to resolve the charges, but the agency will pay only after creditors.
Gemini agreed in February to fully repay Earn program customers a total of $1.1 billion, while also paying a $37 million penalty to New York AG.
Editor’s note: This article was updated with additional details after publication.
daily report newsletter
Start your day today with top news stories, original features, podcasts, videos and more.