Report: Genesis Resolves Fraud Lawsuit with NYAG

Crypto News- Genesis Global Capital, a crypto lending company facing bankruptcy, has reportedly settled a lawsuit filed by New York Attorney General Letitia James. The suit, which alleged fraud involving over $1 billion, also implicated Gemini and Digital Currency Group (DCG).

According to Bloomberg’s Thursday report, the settlement aims to return assets to affected parties, including customers of Gemini Earn and other Genesis creditors, rather than surrendering them to state authorities.

Report: Genesis Resolves Fraud Lawsuit with NYAG

The agreement is pending approval from a bankruptcy judge. This development follows Genesis’s $21 million settlement with the U.S. Securities and Exchange Commission (SEC), where the firm denied any wrongdoing.

However, DCG, Genesis’s parent company, has voiced opposition to the restructuring plan, labeling it a “cramdown” that doesn’t meet bankruptcy legal standards. DCG’s lawyers argue that the plan unfairly favors certain creditors and overpays them, exceeding the amount they’re entitled to.

In a filing on February 6, DCG criticized the restructuring plan, alleging that it unlawfully seizes equity holder rights and benefits a select group of creditors while disadvantaging others.

Recent reports have also indicated that Genesis intends to sell $1.4 billion worth of shares in Grayscale Investments’ Grayscale Bitcoin Trust (GBTC), a move that signals the company’s efforts to address its financial challenges.