Bankruptcy court approves NYAG, Genesis $2 billion settlement News โธ Bankruptcy
Bankruptcy court approves NYAG, Genesis $2 billion settlement
Genesis has secured court approval for its reorganization plan and its $2 billion settlement with the NYAG.
2 min read
Updated: May. 20, 2024 at 8:06 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
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:
โThis settlement provides justice for the victims who invested in Genesis and ensures they receive compensation for their losses.โ
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:
โWe are gratified that the court approved both our Plan and the NYAG settlement agreement. We look forward to making distributions as expeditiously as possible.โ
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Author 
Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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In this article
Genesis
Genesis is an institutional digital asset markets and a full-service digital currency prime brokerageย providing a single point of access for select qualified individuals and global institutional investors.
Digital Currency Group
Digital Currency Group’s mission is to accelerate the development of a better financial system.
Barry Silbert, recognized as a foundational figure in the cryptocurrency landscape, serves as the CEO and founder of Digital Currency Group (DCG).