The US Bankruptcy Court for the Southern District of New York has approved a $2 billion settlement between Genesis Global and the New York Attorney General, along with confirming the company's Amended Plan of Reorganization.

This settlement is designed to compensate defrauded investors, including 29,000 New Yorkers who invested over $1.1 billion through the Gemini Earn program, and it also bans Genesis from operating in New York.

NYAG Letitia James stated:

“This settlement delivers justice to the victims who invested in Genesis, ensuring they receive compensation for their losses.”

In October 2023, the NYAG filed a lawsuit against Genesis, accusing it of hiding more than $1.1 billion in losses. This lawsuit was expanded in February 2024 to include allegations against Digital Currency Group (DCG), its CEO Barry Silbert, and Genesis’s former CEO Soichiro Moro, for an additional $2 billion in investor fraud.

The NYAG’s office is still pursuing legal action against DCG and its executives. DCG formally objected to the settlement, citing concerns about its adherence to the Bankruptcy Code and its effects on DCG's rights as a creditor and equity holder.

This settlement with Genesis is part of Attorney General James’ broader efforts to regulate the crypto industry, having already secured over $2.5 billion from predatory crypto platforms.

Reorganization plan

The court has also confirmed Genesis’ amended Plan of Reorganization, which includes the creation of a Victims’ Fund to distribute Genesis’ remaining assets.

Creditors will receive distributions in kind to maintain the value of their original cryptocurrency 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 pleased that the court has approved both our Plan and the NYAG settlement agreement. We aim to make distributions as quickly as possible.”