-
Digital
Currency
Group
objected
to
subsidiary
Genesis’
proposed
settlement
with
the
New
York
attorney
general’s
office. -
NYAG
sued
DCG
and
Genesis
–
as
well
as
another
company
–
on
fraud
charges.
Digital
Currency
Group
(DCG)
is
objecting
to
the
settlement
between
the
New
York
attorney
general
and
Genesis
–
the
failed
crypto
lender
that
was
among
DCG’s
array
of
digital
assets
businesses.
The
bankrupt
Genesis
Global
struck
a
deal
with
the
attorney
general’s
office
earlier
this
month
to
resolve
charges
that
it
had
defrauded
investors,
but
its
parent
company
contends
that
it
wasn’t
a
proper
settlement.
Genesis
“cannot,
under
the
guise
of
a
‘settlement,’
take
value
from
lower
classes
and
redistribute
it
to
preferred
creditors
in
violation
of
absolute
priority,”
DCG
argued
in
an
objection
filed
Wednesday
in
U.S.
Bankruptcy
Court
Southern
District
of
New
York
–
the
court
that
must
approve
the
New
York
arrangement.
In
a
further
statement
from
DCG
circulated
on
Wednesday,
the
company
called
the
deal
“a
back-door
attempt
to
circumvent
U.S.
bankruptcy
law,”
characterizing
it
as
a
“subversive
arrangement,
put
together
last-minute
and
in
secret.”
Jason
Brown,
a
former
co-chief
deputy
of
the
attorney
general’s
office
and
a
former
senior
federal
attorney
in
New
York,
backed
DCG’s
objection
to
the
Genesis
settlement
with
the
state,
asserting
in
a
court
filing
that
the
details
of
the
settlement
may
not
have
been
arrived
at
properly.
“In
any
case
of
this
magnitude,
I
would
expect
the
parties
to
have
engaged
in
extensive
merits-based
assessments
of
the
claims
prior
to
finalization
of
a
settlement,”
he
argued.
“It
is,
in
my
opinion,
not
in
the
usual
course
to
forgo
such
discussions.”
The
attorney
general’s
office
didn’t
immediately
respond
to
a
request
for
comment.
Last
month,
Genesis
also
settled
a
case
from
the
state’s
Department
of
Financial
Services
(DFS),
agreeing
to
pay
$8
million
and
give
up
its
New
York
BitLicense.
And
earlier
this
month,
the
DFS
amplified
its
case
against
DCG
and
Gemini,
saying
they
were
responsible
for
much
more
in
investors
losses
–
now
at
$3
billion
–
than
the
office
first
asserted
in
its
fraud
lawsuit
tied
to
the
defunct
Gemini
Earn
program.