Bankrupt Genesis Global settles NY Attorney General’s lawsuit

By Thomson Reuters Feb 9, 2024 | 6:11 AM

(Reuters) – Crypto lender Genesis Global has settled a lawsuit that the New York Attorney General brought against it last year, eliminating a major legal burden as it wades through its bankruptcy proceedings.

Attorney General Letitia James had sued the company, its parent Digital Currency Group (DCG) and cryptocurrency firm Gemini Trust Co in October for allegedly “defrauding” investors of more than $1 billion.

James had alleged Genesis defrauded investors through an investment program called Gemini Earn, which it ran with its former partner Gemini.

The Earn program allowed Gemini customers to loan their crypto assets to Genesis and earn interest in exchange.

The settlement agreement filed on Thursday, which needs to be approved by the U.S. Bankruptcy Court for the Southern District of New York, disclosed that Genesis has agreed to cease conducting business in the state of New York.

Last week, Genesis also settled a U.S. Securities Exchange Commission lawsuit over the Earn program, agreeing to a $21 million fine that will be paid only if it is able to fully repay customers in its bankruptcy.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Krishna Chandra Eluri)