- Genesis Global Holdco has resolved a lawsuit accusing it and others of defrauding customers through Gemini Earn.
- The company formally denies wrongdoing and must cease US operations
- Genesis Global is currently involved in the liquidation of its own company, Genesis
Genesis Global Holdco, the parent company of the bankrupt crypto lender Genesis, has resolved a lawsuit filed by New York Attorney General Letitia James. The lawsuit accused Genesis, along with its parent company Digital Currency Group and Gemini Trust Co., of defrauding customers of the Gemini Earn program, which allowed users to earn interest by lending their digital assets. The settlement has been agreed by both parties but still needs to be agreed by the bankruptcy judge.
Genesis Denies All Wrongdoing
James took legal action against Genesis Global Capital, Gemini Trust, and Digital Currency Group (DCG) in October last year, alleging two fraudulent schemes, the “Gemini Scheme” and the “DCG Scheme,” accusing the companies of misrepresentation of creditworthiness and financial concealment. Former Genesis CEO Michael Moro and DCG’s CEO Barry Silbert were individually implicated in the suit, which claims that the entities defrauded over 232,000 customers for more than $1 billion.
Genesis Holdco, which is currently in the process of liquidating its assets, denies all wrongdoing in the settlement but has agreed to cease its operations in New York as part of the deal. The settlement agreement stipulates that assets that would have otherwise been claimed by the state of New York will now be redirected to former customers of the Gemini Earn program and other creditors of Genesis.
This agreement follows a previous agreement reached between Genesis and the US Securities and Exchange Commission (SEC) to resolve allegations related to the Gemini Earn program; the SEC had also accused Genesis of offering unregistered securities through the Earn program.
Genesis Still Has DCG Battle Ahead
Aside from its settlement with the Attorney General’s office, Genesis is also facing opposition to its proposed liquidation plan from Digital Currency Group, with the latter arguing that the plan could unfairly benefit some creditors at the expense of others.
Genesis is scheduled to seek approval for both the settlement agreement and its liquidation plan from Judge Sean Lane of the New York bankruptcy court on February 14.