- New York Attorney General Letitia James maintained her tough stance on cryptocurrencies following the company's $2 billion settlement with Genesis.
- The NYAG warned other crypto companies that they would face penalties if they did not follow the rules.
New York Attorney General Letitia James Warned Cryptocurrency companies play by the same rules as any other company.
James issued the warning on Twitter following the company’s $2 billion settlement with bankrupt crypto firm Genesis, a subsidiary of Digital Currency Group (DCG).
“Crypto companies have to play by the same rules as everyone else, and we will take action against those who don't.”
Bankrupt crypto lender Genesis received court approval last week to pay about $3 billion, but this removes parent company DCG from claims.
New York Attorney General Letitia James steps up tough stance on cryptocurrencies
In October 2023, the NYAG filed a lawsuit against Genesis, alleging that the company misled investors and concealed losses on its outstanding loans. read,
“Genesis, along with other defendants, concealed more than $1.1 billion in losses from investors who provided digital assets through an investment program called 'Gemini Earn.'
Gemini Earn allowed investors to earn interest on their crypto assets, but a “risky” deal with Genesis meant investors were exposed to losses.
Genesis concealed $1.1 billion in risk losses that were allegedly linked to loans to bankrupt Three Arrows Capital (3AC) and Babel Finance.
According to the NYAG, 29,000 New Yorkers were among the victims who should receive full compensation from the bankrupt company and its associates, and the $2 billion settlement will help them do just that.
“This historic settlement is a major step in ensuring some justice is achieved for the victims who invested in Genesis.”
James added that investor losses were primarily due to a “lack of oversight and regulation in the cryptocurrency industry.”
Meanwhile, Genesis interim CEO Dehraa Islim said the company's goal was to “maximize value for all creditors” and that it was pleased with the settlement agreement.
It is worth noting that the NYAG has obtained multiple fines and settlements against various cryptocurrency companies, including Kucoin, and the $2 billion settlement with Genesis strengthens the agency’s crackdown on “egregious” cryptocurrency companies.
Some market participants have long blamed cryptocurrency's woes on regulatory uncertainty in the United States.
but, FIT21 Act The bill in the U.S. House of Representatives would be a helpful stepping stone to make that happen if it passes the U.S. Senate and becomes law.
