In the wake of a $2 billion settlement with cryptocurrency companies, Attorney General Letitia James of New York issued a warning on Saturday to similar companies, advising them to "play by the same rules."
Letitia James disclosed on Monday that she and cryptocurrency companies had reached a $2 billion settlement. This action will assist investors, including nearly 30,000 New Yorkers, in recovering losses they claim they suffered as a result of the businesses' purported fraud.
'Play by the rules' as per James
The cryptocurrency companies Genesis Global Capital, Genesis Asia Pacific PTE, and Genesis Global Holdco were accused by James' office of concealing losses totaling more than $1 billion from investors, leading to the settlement.
The case expanded earlier this year to include allegations that top executives from Genesis and Digital Currency Group defrauded investors of $2 billion.
The companies will be prohibited from operating in the state as part of the settlement, and after creditors are paid, a victims' fund will be established to reimburse investors for a portion of their investment.
"Investors should be made whole when they lose money due to deception and manipulation," James stated in a statement. We observe the negative effects and losses that can arise in the real world as a result of the cryptocurrency industry's lack of supervision and regulation. Investors in New York should have the assurance that a well-regulated market brings."
Crypto companies must play by the same rules as everyone else.
— NY AG James (@NewYorkStateAG) May 25, 2024
We will go after those that don’t.https://t.co/IrvoPDSlLy
James's goal to "increase oversight and regulation in this industry and protect New York investors, which has secured more than $2.5 billion from predatory cryptocurrency platforms to date," is being furthered, according to the attorney general's office, by the recent settlement.
This comes after James announced in May 2023 that legislation to strengthen regulations on the cryptocurrency industry was proposed last year. In line with laws governing other financial services, the bill would protect investors by enforcing commonsense measures, eliminating conflicts of interest, and increasing transparency.
In order to avoid conflicts of interest, the bill would also forbid individuals from owning the same businesses, such as brokerages and tokens, and mandate independent public audits of cryptocurrency exchanges.
Sh is also warning cryptocurrency companies, but she's also asking New Yorkers who have been duped by dishonest behavior in the sector to come forward to her office. She's also encouraging industry employees who have seen wrongdoing or fraud to come forward anonymously to her office as whistleblowers.
However, the bankruptcy court's approval is required for the settlement to go through. Genesis refuses to acknowledge her guilt.
"Under this settlement, Genesis neither admits nor denies the allegations of this lawsuit, and the suit will continue against the remaining defendants, as well as Genesis' former business partner, Gemini Trust Company, LLC," said the office of James.
A Genesis representative previously told Newsweek that while the company would not comment on anything other than the settlement, it has been concentrating on "maximizing value for all creditors."
Maximizing value for all creditors has been their aim throughout this process, and they are pleased that the court accepted both its plan and the NYAG settlement agreement. Genesis' interim CEO, Derar Islim, said in the statement that they also look forward to implementing the plan and making distributions as quickly as possible.
Furthermore, as per the company's statement, creditors will receive compensation in the form of the original assets they lent as much as possible; they will not be restricted to the USD value of the cryptocurrency assets as of the petition date, and they will not be converted into cash or other forms of repayment that may not accurately reflect the value of the cryptocurrency assets in the present or future.