Bankrupt crypto firm Genesis Global decides to settle $1B lawsuit

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Genesis Global Trading reached the settlement phase with the NY AG office. 

Genesis Global Trading was a popular crypto lending platform. In Nov 2022, the financial position of this company struggled badly because of its significant financial exposure to the FTX crypto exchange. In Jan 2023, Genesis filed for bankruptcy under the Chapter 11 code.

In Oct 2023, the New York Attorney General (NY AG) Letitia James attacked Genesis with a lawsuit. Through the suit, James alleged that the company defrauded customers for more than $1 billion.

Through the lawsuit, James dragged Genesis Global, along with its parent company Digital Currency Group (DCG) and Gemini crypto exchange under a single crypto fraud. Allegedly these three players defrauded 230,000 investors, including at least 29,000 residents of New York, by wisely concealing the risks associated with the Gemini Earn program.

In the latest development, Genesis filed a motion in the bankruptcy court to confirm that the company is ready to settle the case with NY AG. 

This decision is really surprising for people close to this matter because no one expected it would happen, as everyone was thinking that the Gemini earning program was safe.

As per reports, Gemini & Genesis are aware that they will face huge legal hurdles in the future because the NY AG decided to expand the lawsuit against these crypto players.

a $1 billion lawsuit will change into a $3 billion lawsuit, for defrauding additional individuals and institutions.

Earlier this week, Genesis filed a motion in the court to get approval to sell $1.6 billion worth of Grayscale-issued financial assets, including GBTC, and ETH funds. 

Recently few reports claimed that Genesis would pay $21 million to the United States Securities & Exchange Commission (SEC). 

Read also: SEC chairman faced huge criticism from US Senators over Handling Of Crypto Case “DEBT Box”