Attorney General James secures $2B in latest crypto scam

Attorney General James filed a lawsuit in October 2023 alleging that Genesis, alongside other defendants, concealed more than $1.1 billion in losses from investors. The lawsuit expanded in February to include Digital Currency Group, Inc. (DCG), Genesis, DCG’s CEO Barry Silbert, and Genesis’ former CEO Soichiro Moro for defrauding an additional $2 billion. 

Genesis neither admits nor denies the allegations, and the lawsuit continues against the remaining defendants and former business partner Gemini Trust Company, LLC.

The settlement, requiring bankruptcy court approval, will establish a Victims’ Fund for Genesis’ creditors. The fund will receive distributions from Genesis’ remaining assets after initial bankruptcy payments. If creditors are not fully compensated based on current digital asset values, the fund will receive up to $2 billion from Genesis’ assets to cover their actual losses.

Attorney General James encourages New Yorkers affected by deceptive practices in virtual asset markets to report these issues to her office and urges industry workers to file whistleblower complaints.

James has led efforts to protect investors and regulate the cryptocurrency industry. She has secured more than $2.5 billion from predatory cryptocurrency platforms, including $22 million from KuCoin, $4.3 million from Coin Cafe, and $24 million from Nexo. Other notable actions include suing the former CEO of Celsius, issuing taxpayer notices for virtual currency investors, and directing unregistered crypto lending platforms to cease operations.