In a major development, a New York bankruptcy judge has given the nod to a $2 billion settlement between the New York State Attorney General’s office and Crypto lender Genesis Global Holdco.
Genesis Finally Gets Part Relief
This milestone comes after Genesis filed a motion in the U.S. Bankruptcy Court in the Southern District of New York back in February, seeking Judge Sean Lane’s approval for the settlement.
In January 2022, Genesis filed for bankruptcy protection after experiencing financial losses due to the collapse of crypto hedge fund Three Arrows Capital and Crypto exchange FTX in the same year.
Letitia James, the Attorney General of New York, filed a lawsuit against Gemini, Genesis, and later its parent company, Digital Currency Group, regarding a crypto lending program offered by Gemini.
This program, introduced in 2021, targeted retail investors and claimed to provide an opportunity to pay up to 7.4% APY.
Per the settlement, the NY General’s office said Genesis has chosen not to admit or deny the allegations made in the lawsuit. The suit will proceed against the remaining defendants, including Gemini.
Happy Ending for Crypto enthusiasts in New York
NYAG Letitia James said on Monday that when investors become victims of fraud and manipulation, it is crucial to provide them with full compensation.
In a statement, she said the “settlement is a significant step towards providing justice to the investors in Genesis.” James stated that this settlement is the largest ever made against a cryptocurrency company in the history of New York.
As part of the agreement, a victim fund has been established to provide assistance to New York investors who contributed over $1.1 billion to Genesis through the Gemini Earn program.
In light of this, Gemini, one of Genesis’s creditors, recently announced that it will start returning assets to its customers. This came after the bankrupt firm received approval for its bankruptcy plan in a U.S. court in the past week.
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