The US Bankruptcy Court for the Southern District of New York has given the green light to the $2 billion settlement between Genesis Global and the New York Attorney General. Additionally, it has ratified the Amended Plan of Reorganization for the bankrupt company and its subsidiaries.

The settlement aims to provide restitution to deceived investors, including around 29,000 individuals from New York who collectively invested more than $1.1 billion through the Gemini Earn program. Moreover, the agreement bars Genesis from conducting business in New York.

New York Attorney General Letitia James stated:

“This settlement offers redress for the victims who put their money into Genesis and ensures they receive compensation for their losses.”

The NYAG filed a lawsuit against Genesis in October 2023, alleging that the company hid losses surpassing $1.1 billion.

In February 2024, the lawsuit was expanded to include accusations against Digital Currency Group (DCG), its CEO Barry Silbert, and Genesis’s former CEO Soichiro Moro, involving an additional $2 billion in investor fraud.

The NYAG’s office is pursuing legal action against DCG and its executives. DCG raised official objections to the settlement between Genesis and the NYAG, citing concerns about its adherence to the Bankruptcy Code and its potential impact on DCG's rights as a creditor and equity holder.

The agreement with Genesis is

part of Attorney General James’ ongoing efforts to regulate the cryptocurrency industry, having secured over $2.5 billion from predatory crypto platforms thus far.

As part of the reorganization plan, the court also approved Genesis’ amended Plan of Reorganization, enabling the establishment of a Victims’ Fund to distribute the company’s remaining assets.

Creditors will receive distributions in the form of digital assets to maintain the value of their original cryptocurrency holdings, rather than converting them into cash. If creditors are not fully compensated based on current digital asset values, the fund will provide up to $2 billion.

Genesis interim CEO Derar Islim commented:

“We are pleased that the court has approved both our Plan and the NYAG settlement agreement. We are eager to distribute funds as swiftly as possible.”