- NYAG Letitia James maintained a strict stance on crypto after the $2B Genesis settlement.
- NYAG warned other crypto firms to face consequences if they don’t play by the rules.
As a researcher with a background in finance and experience in following the cryptocurrency industry, I have observed NYAG Letitia James’s unwavering stance on crypto firms adhering to regulations. Her recent warning to other crypto companies comes after the $2B settlement with Genesis, a subsidiary of Digital Currency Group (DCG), which was ordered to pay out approximately $3 billion to its creditors.
I, as a researcher, would like to share that New York Attorney General Letitia James has issued a warning to cryptocurrency companies, urging them to adhere to the same regulations and compliance standards as other businesses operating within the state.
James sounded an alert on X (previously known as Twitter) after reaching a $2 billion agreement in settling the bankruptcy case involving Genesis, a subsidiary of Digital Currency Group (DCG).
“Crypto companies must play by the same rules as everyone else. We will go after those that don’t.”
Last week, Genesis, the insolvent crypto lending company, obtained court permission for distributing approximately $3 billion in payments to its creditors. This action effectively shielded its parent firm, Digital Currency Group (DCG), from being involved in the ongoing claims.
NYAG Letitia James reinforces strict crypto stance
In October 2023, the New York Attorney General (NYAG) filed a lawsuit against Genesis, accusing the company of deceiving investors by hiding its loan book shortfalls. According to the NYAG’s announcement, Genesis engaged in fraudulent activities.
As an analyst, I would rephrase it this way: I’ve discovered that Genesis, among other named parties, kept hidden from investors over a billion dollars’ worth of losses incurred via their digital asset investment program, Gemini Earn.
With Gemini Earn, investors could generate returns from their cryptocurrency holdings. Yet, the partnership with Genesis introduced potential risks leading to investors’ losses.
As a researcher examining the financial disclosures of Genesis, I uncovered approximately $1.1 billion in hidden risks. These risks are said to be associated with loans extended to the distressed entities Three Arrows Capital (3AC) and Babel Finance.
Based on the New York Attorney General’s report, approximately 29,000 New York residents were harmed by the bankrupt company and its partners. The $2 billion settlement aims to provide compensation for their losses.
“Reaching this historical agreement is significant progress towards providing some measure of compensation for those who put faith in Genesis’ investments.”
As an industry analyst, I would express James’ statement as follows: I found that the main reason for the investors’ losses was the absence of adequate oversight and regulation in the cryptocurrency sector.
I, Derar Islim, interim CEO of Genesis, have expressed our commitment to creating the greatest possible value for all creditor parties. With satisfaction, I announce that we have reached a settlement agreement in line with this objective.
Notable is the fact that the New York Attorney General’s (NYAG) office has obtained numerous penalties and agreements with different cryptocurrency companies, including Kucoin. The $2 billion Genesis settlement serves as a clear indication of NYAG’s increased scrutiny towards alleged unscrupulous crypto firms.
Some market watchers have long blamed crypto woes on the US’s lack of regulatory clarity.
As a crypto investor, I’m keeping a close eye on legislative developments that could impact our industry. The recent passing of the FIT21 Act in the US House is an encouraging sign. If this bill makes it through the Senate and eventually becomes a law, it would represent a significant step forward for the crypto space in the United States. This legislation could bring clarity to regulatory frameworks and foster innovation, potentially paving the way for increased adoption and investment opportunities.
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2024-05-27 19:03