New York’s Attorney General, Letitia James, is intensifying her crackdown on cryptocurrency companies that fail to comply with established regulations. In a recent statement on the social network X, James made it clear that she will not hesitate to take legal action against entities that violate the law. “Cryptocurrency companies must adhere to the same rules as everyone else. We will pursue those who do not,” declared the attorney general.
This warning comes on the heels of a significant settlement with Genesis, a company that is currently facing financial difficulties. Genesis has agreed to pay a hefty $2 billion fine and has been prohibited from operating in the state of New York. The settlement, which is subject to judicial review and approval due to the company’s recent bankruptcy, also involves the establishment of a fund to compensate victims of fraud. “The settlement will create a victims’ fund to assist defrauded investors, including over 29,000 New Yorkers who have contributed more than $1.1 billion to Genesis through the Gemini Earn investment program,” explained James.
Genesis’s situation has been further complicated by the freezing of client funds since November 2022, when the company suspended withdrawals due to liquidity issues following the collapse of the cryptocurrency hedge fund Three Arrows Capital.
In addition, in October 2023, Letitia James took legal action against Genesis, its former CEO Soichiro Moro, and parent company Digital Currency Group, accusing them of attempting to conceal losses amounting to $1.1 billion. The investigation into Digital Currency Group gained traction in August, focusing on its ties to Genesis, which was grappling with financial problems.
James’s initiative is a clear indication of her ongoing efforts to regulate the cryptocurrency market in New York, setting a precedent for legal compliance and investor protection.
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