New York’s Attorney General, Letitia James, is sending a clear message to cryptocurrency companies, warning that she will take action against those who break the law. In a post on the social media platform X, James emphasized that digital asset firms must adhere to the same regulations as any other industry. She stated, “We will go after those that don’t.”
This warning comes shortly after the NYAG reached a significant settlement of $2 billion with the troubled cryptocurrency firm, Genesis. Alongside the financial penalty, Genesis has been prohibited from operating in New York. The settlement, which required approval from a bankruptcy court due to Genesis’ previous bankruptcy declaration, establishes a fund to support defrauded investors. Approximately 29,000 New Yorkers, who collectively invested over $1.1 billion through the Gemini Earn investment program, will benefit from this fund.
Genesis has faced challenges since November 2022 when the cryptocurrency lender suspended withdrawals due to liquidity issues caused by the collapse of crypto hedge fund Three Arrows Capital. In October 2023, James filed a lawsuit against Genesis, its former CEO Soichiro Moro, and its parent company, the Digital Currency Group (DCG). The allegations suggest that the firms attempted to conceal losses amounting to $1.1 billion.
Rumors of the NYAG’s investigation into the Digital Currency Group’s connection to Genesis initially surfaced in August.
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